Dividends are usually tax-deductible, and there is therefore a tax benefit to the business

Paying dividends increases the value of the business

Paying a dividend is always a better use of the value generated by the business than keeping this value in the business

Owners like to receive a regular cash return on their investment, otherwise they can get nervous and consider selling their shares, which has reputational and other potential consequences for the business

The more debt you have, the higher your profits, since interest is often deductible for tax, and therefore less tax is payable

When interest rates are low, the more debt you take out, the higher your profits will be

Debt is less risky than equity

Leverage can boost a company's profits if the company is able to generate a return on its assets that exceeds the interest rate

A mixture of debt, equity, and assets

A mixture of debt and equity

Only debt

True

False

Management are only concerned with reports arising from management accounting and not those arising from financial accounting

Management accounting involves only the recording function, whereas financial accounting involves only the reporting function

Management accounting is performed by management, whereas financial accounting is performed by accountants

Management accounting informs the decisions of management, while financial accounting informs the decisions of existing and potential investors, lenders and other creditors