Answer: Debt being less risky than equity and interest payments being tax deductible.
Explanation: Debt securities are the securities having fixed interest rates and a fixed time period to maturity. The debt holders are not considered owners of the company but rather they are the the creditors.
Debt is considered the cheapest source of finance for a number of reasons the main of which is the interest payments on debt could be deducted as expense while computing taxable income .
<em>In a firm's income statement, interest payments on debt are deducted </em><em>before </em><em>corporate taxes are calculated, which</em><em> reduces</em><em> the firm's tax liability.</em>
<h3>Income statement: What is it?</h3>
An overview of the company's operations for a specific time period is provided in the income statement. The revenue (gross and net sales), cost of products sold, operational expenditures (selling and general and administrative expenses), taxes, and net profit or loss are the statement's primary components.
<h3>What is displayed on a firm's income statement?</h3>
The statement logically and coherently presents the company's revenue, costs, gross profit, selling and administrative expenses, other expenses and income, taxes paid, and net profit.
learn more about firm's income statement here <u>brainly.com/question/14733237</u>
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I think it would be “oligopoly”
Answer: Derivative security
Explanation:
Derivative security is referred to as the security that provides a payoff which depends on the values of other assets.
A derivative security is referred to as the financial instrument whereby the value depends on the value of another asset. There are different types of derivatives such as options, swaps, futures, and forwards. Example of derivative security is convertible bond.
Bondholders regularly receive interest income at a preset interest rate, or coupon rate, for a specified period of time. This is the bond’s maturity period.<span> Holders can also sell the bonds in the bond market at their current market price.
So the Answer is BONDS
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