Which of the Following Is Not an Advantage of Debt

question 21

Multiple Choice

Which of the following is not an advantage of debt?

• A) Debt is paid back in "cheaper" dollars during inflationary periods.
• B) Bondholders have no control over the actions of management.
• C) Cost of debt can lower the weighted overall cost of capital.
• D) All of these are advantages.

---

Definitions:

Automobile Manufacturer

A company engaged in the designing, production, marketing, and selling of motor vehicles.

Sample

A subset of individuals or observations selected from a larger population, used to infer or make predictions about the population.

Poisson Distribution

A probability distribution that measures the probability of a given number of events happening in a fixed interval of time or space when these events occur with a known constant mean rate and independently of the time since the last event.

P-Value Approach

A method in statistical hypothesis testing that uses the calculated probability to determine the significance of the observed data.