Which of the Following Is a Disadvantage to a Business

Multiple Choice

Which of the following is a disadvantage to a business of using debt to finance its capital projects?

A) Contributes to the dilution of management control.
B) Takes longer to acquire than equity financing.
C) By making the business riskier, contributes to a higher weighted average cost of capital.
D) Is more expensive than equity financing because of tax considerations.
E) Reduces the positive impact of leverage in a company with growing earnings.