Question $11$

Kern's Kernel Corporation needs to raise $$300,000$ of additional capital to purchase a grain silo. The corporation could borrow

$$300,000$ from a local bank or it could issue additional shares of common stock to a handful of additional investors in exchange for

$$300,000.$

Jen, the company's CFO, is considering relative advantages and disadvantages of both options. She concluded that one option could

be more risky than the other because

payments to a lender are

whereas the payment of

to stockholders is

Prompts

Answers

debt

dividends