is Question 1 2 pts Which of the following statements is TRUE about sources of finance used by companies: Small and medium-sizes companies cannot easily afford the costs of obtaining a public listing on the Stock Exchange Share issue (equity) is considered an internal source of finance for the company as the shareholder become owners. Retained earnings area long-term external source of finance available for the company. Interest and dividend payments on debt and equity are tax- deductible

Question

is Question 1 2 pts Which of the following statements is TRUE about sources of finance used by companies: Small and medium-sizes companies cannot easily afford the costs of obtaining a public listing on the Stock Exchange Share issue (equity) is considered an internal source of finance for the company as the shareholder become owners. Retained earnings area long-term external source of finance available for the company. Interest and dividend payments on debt and equity are tax- deductible

Answer 1

Answer:Explanation: Let's break this down step by step as you taught us:1. Small and medium-sized companies not being able to easily afford the costs of obtaining a public listing on the Stock Exchange - This is in general true. Capital markets possess some barriers in regard to costs and regulations which may put obstacles for smaller firms to engage in a public listing.2. Considering share issue (equity) as an internal source of finance - This statement is false. Issuing share capital is classified as an external source of funding considering the company acquires funds from external shareholders - thereby the shareholders aren't simultaneously proprietors per say, they possess ownership rights.3. Classification of retained earnings as a long-term external source of finance - This is false. Retained earnings refer to profit not distributed as dividends but retained in the company. Therefore, they are internal sources of finance, not external.4. Dividend payments on debt and equity are tax-deductible - This also isn't accurate. In fact, it is the interest on debt (loan, debentures) that can be tax-deductible but dividends on shares (equity) are not.Answer: The only true statement among the given options is that small and medium-sized companies cannot easily afford the costs of obtaining a public listing on the Stock Exchange.