Which Statement Describes the Major Drawback to the Use of Debt

Multiple Choice

Which statement describes the major drawback to the use of debt financing?

A) The interest paid is not tax-deductible.
B) Debt financing is a form of permanent financing.
C) Debt financing gives common stockholders a voice in company management.
D) Financial risk is always a possibility with debt financing.
E) Dividends are paid from after-tax income.