Which of the Following Statements Concerning Debt Is Correct

question 12

Multiple Choice

Which of the following statements concerning debt is correct?

• A) As a company uses more debt, the risk to the company decreases.
• B) Interest payment on debt must be paid only if the company has sufficient cash flow.
• C) As debt increases, the fixed costs a company must pay increase.
• D) Debt is frequently the costliest method of raising additional financing dollars.

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Definitions:

Ethics Ombudsperson

An appointed official within an organization who provides confidential assistance and guidance to employees on ethical dilemmas or concerns.

Ethical Dilemmas

Complex situations where a person must choose between two or more conflicting moral imperatives, making the decision difficult.

Price Discrimination

A pricing strategy where a company charges different prices for the same product or service to different customers, based on various factors.

Customers

Individuals or entities that purchase goods or services from another individual or business, often the focal point in marketing efforts.