To Help Avoid the Thin Capitalization Problem, It Is Advisable

question 95

True/False

To help avoid the thin capitalization problem, it is advisable to make the repayment of the debt contingent upon the corporation's earnings.

---

Definitions:

Cash Interest Paid

This represents the actual amount of interest in cash that a company pays on its debts over a specific period of time.

Sold At A Discount

Selling a product or security for less than its face value or normal selling price.

Cash Interest Paid

The actual cash outflow for interest payments on debt obligations during a specific reporting period.

Sold At A Discount

A financial term indicating that a security or product is sold for less than its nominal or face value.