Multiple Choice
The risk of the debt capital is less than that of other long-term contributors of capital because
A) they have a higher priority of claim against any earnings or assets available for payment.
B) they have a far stronger legal pressure against the company to make payment than do preferred and common stockholders.
C) the tax-deductibility of interest payments lowers the debt cost to the firm substantially.
D) all of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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