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:

National Association of Colored Women

An organization formed in 1896 in the United States, focused on promoting civil rights and improving the conditions for African-American women and their families through education, job training, and community service.

Lynchings

Extrajudicial killings, usually by hanging, performed by a mob with the intention of enforcing justice, revenge, or intimidation without legal trial.

Nurseries

Facilities or spaces where young plants and trees are cultivated and grown before being transplanted to their final location.

Jane Addams

An American social reformer and pacifist, co-founder of Hull House in Chicago, and leader in women's suffrage and world peace, who was awarded the Nobel Peace Prize in 1931.