The disadvantages of issuing common stock versus long-term debt include all of the following EXCEPT
A) the potential dilution of earnings.
B) high cost.
C) no maturity date on which the par value of the issue must be repaid.
D) the market perception that management thinks the firm is over-valued, causing a decline in stock price.

Question

Quizplus · Accepted Answer

Issuing common stock does not have a maturity date, which is actually an advantage, not a disadvantage, as it means the company does not have to repay the principal amount like it would with debt.

The Disadvantages of Issuing Common Stock Versus Long-Term Debt Include