Multiple Choice
Which of the following is a disadvantage of debt financing?
A) The firm is required to make fixed payments to the creditors.
B) Interest payments on debts are tax deductible.
C) Additional funds can be acquired without requiring existing stock holders to invest more of their money.
D) Using debt can increase the return on equity to owners during periods of strong earnings.
Correct Answer:
Verified
Correct Answer:
Verified
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