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From the statements below, select all that are TRUE regarding long-term financi...
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From the statements below, select all that are TRUE regarding long-term financing.
(1) In the case of liquidation equity is repaid only after debt has been repaid.
(2) Equity is considered to be part of an organisation for life while debt have a finite life since it is repaid over time.
(3) Raising too much debt financing by means of long-term loans will not affect the risk profile of an organisation.
(4) A trade-off will always be made between risk and return in cases where a choice needs to be made between financing with either equity or with debt.
(a) Statement (1)
(b) Statement (2)
(c) Statements (2), (3) and (4)
(d) Statements (1), (2) and (4)