Which of the Following Is a Major Disadvantage of Debt

question 38

Multiple Choice

Which of the following is a major disadvantage of debt financing?

• A) It is too readily available and so firms may take on too much debt.
• B) High levels of borrowing may be an impediment to future investment.
• C) It affects the ownership structure of the business.
• D) Debt servicing costs may rise with interest rates irrespective of company performance.

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Definitions:

Religious Services

Ceremonies or rituals conducted in honor or worship of a divine entity or entities, often held in dedicated spaces like churches, mosques, or temples.

Hinduism

A major world religion that originated on the Indian subcontinent, characterized by a belief in reincarnation, karma, a multitude of gods and goddesses, and a pursuit of dharma (righteous living).

Reincarnation

The belief that after death, the soul or spirit begins a new life in a new body, potentially that of a human, animal, or spiritual entity.

Rituals

Prescribed procedures or ceremonial acts followed in a religious or secular context, often rich in symbolism and tradition.