Which of the Following Is a Benefit of Using Debt

question 13

Multiple Choice

Which of the following is a benefit of using debt over equity as a source of long-term financing?

• A)Interest on debt is tax deductible.
• B)An increase in the use of debt makes a company less risky.
• C)Debt financing may contain covenants that help management manage the company.
• D)Interest payments on debt may be deferred.

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