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Which of the following is incorrect about the debt vs equity components of financial instruments?...

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Accounting

Which of the following is incorrect about the debt vs equity components of financial instruments?

None of the answers.

"If classified as debt, then periodic payments are classified as interest expenses, which will affect profits. "

"Compound financial instruments contain both a financial liability and an equity component, such as convertible bonds."

"If classified as equity, then the payments are dividends and will not impact reported profits."

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