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From the Point of View of the Business, Which of These

Question 23

Multiple Choice

From the point of view of the business, which of these is an advantage of using long-term debt rather than equity in financing?
I. It does not dilute the control of existing owners.
II. Creditors do not share in any excess profits of the entity.
III. Interest payments are a fixed commitment regardless of profits.
IV Interest is tax deductible.


A) I, II, III, IV
B) I, IV
C) I, II, IV
D) I

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