An advantage of bond financing is that it does not affect shareholder control.Group startsTrue or False

Which of the following is not an advantage of debt financing? Group of answer choices Shareholder control is not affected. Interest payments are cheaper than dividend payments. The return on shareholder’s equity may be higher. Interest is deductible from income for tax purposes.

If a bond's interest period does not coincide with the issuing corporation's accounting period, an adjusting entry is necessary to recognize bond interest expense accruing since the most recent interest payment.Group startsTrue or False

One advantage of using equity financing is dividends are discretionary, not an obligation like debt financing.A.TrueB.False

Other things being equal, the higher the debt to equity ratio, the higher the risk of bankruptcy.Group startsTrue or False

Two advantages that debt financing has over financing from the issue of shares are:Group of answer choicesInterest expense can be claimed as a tax deduction and there is no dilution in share ownership.There is more profit available to pay dividends to shareholders and dividends can be claimed as a tax deduction.The principal must be paid back at maturity and dividends can be paid to shareholders because earnings per share increases.Interest payments on outstanding debt are required periodically and the interest expense can be claimed as a tax deduction.