Which Is a Major Shortcoming of Issuing Debt Instead of Equity

question 136

Multiple Choice

Which is a major shortcoming of issuing debt instead of equity?

• A) Shareholder control is not affected.
• B) Income tax payable will be less.
• C) Interest must be paid regularly.
• D) Dividends are not tax deductible.

---

Definitions:

Indian Mine

Refers to a mining operation within India, an industry that extracts valuable minerals or other geological materials from the Earth's crust.

Slave

A person who is legally owned by another person and is forced to work for them without pay.

Sea Captain

A person who commands and is responsible for a ship and its crew during sea voyages.

Regent Diamond

A famous diamond originally found in India, known for its size, beauty, and colorful history of ownership.