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The Cost of Debt Financing Results from ________

Question 106

Multiple Choice

The cost of debt financing results from ________.


A) the decreased probability of bankruptcy caused by debt obligations
B) the risk-return trade-off associated with ownership of a firm
C) the costs associated with lenders having less information about a firm's prospects than investors and managers
D) the agency costs of the lenders' monitoring and controlling a firm's actions

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