Which of the Following Is NOT a Reason Why Debt

question 45

Multiple Choice

Which of the following is NOT a reason why debt capital is considered to be the least risky source of capital?

• A) It does not normally have to be repaid at a specific future date.
• B) It has a strong legal position.
• C) It has a high priority claim against assets and earnings.
• D) It is a low cost source of capital because interest payments are tax deductible.

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Definitions:

Manufacturing And Operations

The processes involved in producing goods and overseeing all aspects of production, from the raw materials stage to the final product.

Adequate Parking

The availability of enough parking spaces to meet the needs of a venue, facility, or location, contributing to its accessibility.

Business Establishment

A location where commercial, industrial, or professional activities are conducted.

Geographic Market

The physical region or area in which a company operates and competes for customers, defined by its geographical boundaries.