Which of the Following Is a Difference Between Debt and Equity

Multiple Choice

Which of the following is a difference between debt and equity capital?

A) Debt capital does not require periodic payments, whereas equity capital requires period payments.
B) Debt capital requires returns in proportion to profits, whereas equity capital requires a fixed rate of return.
C) Debt capital provides a tax shield, whereas equity capital does not provide a tax shield.
D) Debt capital affects operating leverage, whereas equity capital affects financial leverage.