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Which of the Following Is a Major Disadvantage of Debt

Question 38

Multiple Choice

Which of the following is a major disadvantage of debt financing?


A) It is too readily available and so firms may take on too much debt.
B) High levels of borrowing may be an impediment to future investment.
C) It affects the ownership structure of the business.
D) Debt servicing costs may rise with interest rates irrespective of company performance.

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