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5. Which of the following is FALSE regarding the differences between debt and common stock? A) Interest payments are legally binding while dividend payments generally
5. Which of the following is FALSE regarding the differences between debt and common stock?
A) Interest payments are legally binding while dividend payments generally are not.
B) A company with excess debt may go bankrupt, but an all-equity firm cannot.
C) Equity is ownership in a firm but debt is not.
D) Stockholders have voting power while creditors do not.
E) Periodic payments made to either class of security are tax deductible for the issuer.
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