Distinguish between equity and debt

      

Distinguish between equity and debt

  

Answers


Dana
Debt is not an ownership interest but equity represents ownership
Equity holders are compensated in form of dividends which are tax deductible while debt holders’ payments are in form of interest payments which are tax deductible
Debt is a liability to the firm unlike in the case of equity where the firm is under no obligation to pay dividends

Dana05 answered the question on July 18, 2019 at 19:21


Next: Discuss contingent financial instruments and give an example
Previous: Differentiate between the primary and the secondary markets in the issuance of shares

View More Economics Questions and Answers | Return to Questions Index


Exams With Marking Schemes

Related Questions