Which of These Is a Disadvantage to Shareholders of Using

question 45

Multiple Choice

Which of these is a disadvantage to shareholders of using long-term debt rather than equity?

• A) Interest is tax deductible
• B) Interest payments must be made on time regardless of a reduction in profitability
• C) Lenders do not share in excess profits
• D) Lenders do not have voting rights

---

Definitions:

Problem-Solving

The process of identifying a problem, devising solutions, and implementing an effective course of action.

Criteria Identification

The process of defining the standards or benchmarks that will be used to evaluate or assess something.

Problem Analysis

A systematic examination of an issue to understand its components, causes, and potential solutions.

Solution Implementation

The process of executing strategies and actions to solve a problem or address a specific need.