If a Firm That's Doing Very Well Pays the Same

Multiple Choice

If a firm that's doing very well pays the same return to equity and debt shareholders, and needs to raise more money, it may be wise to use debt because:

A) interest is tax deductible resulting in a lower cost to the firm.
B) Equity is the less desirable source of capital.
C) borrowing is always less of an effort than raising additional equity capital.
D) All of the above