Which of the Following Is True of the Advantages of Raising

Multiple Choice

Which of the following is true of the advantages of raising corporate debt through bank loans?

A) Capital gains on debt are not taxed.
B) Costs associated with monitoring debt are low.
C) Equity capital costs are low.
D) Corporations are equally inclined to use debt and equity.
E) The threat of potential bankruptcy is high in equity financing compared to bank loans.