Glenda Is Trying to Decide Between the Use of Debt

question 8

Multiple Choice

Glenda is trying to decide between the use of debt and the use of equity to finance her young business. She should remember that

• A) her return on assets will be less if she uses debt financing.
• B) using other people's money to finance one's business is seldom a good idea.
• C) the lender will have partial control of the business.
• D) debt must be repaid even if the company does not make a profit.

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Definitions:

Ambiance

The character and atmosphere of a place, which contributes to its overall impression and experience.

Niche Market

A specialized segment of the market for a particular kind of product or service, aimed at satisfying specific customer needs, not addressed by mainstream providers.

Pharmaceutical Companies

Companies engaged in the research, development, manufacture, and distribution of drugs and medications for medical diagnosis and treatments.

Diversified Market

A market characterized by a variety of products, services, or sectors, which reduces investment risk and capitalizes on different growth opportunities.