Which of the Following Is Not an Advantage of Debt

question 21

Multiple Choice

Which of the following is not an advantage of debt?

• A) Debt is paid back in "cheaper" dollars during inflationary periods.
• B) Bondholders have no control over the actions of management.
• C) Cost of debt can lower the weighted overall cost of capital.
• D) All of these are advantages.

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Definitions:

Watson

John B. Watson, an American psychologist who established the psychological school of behaviorism.

Cognitive Theory

A psychological approach that emphasizes mental processes such as perception, memory, and problem-solving as central to understanding behavior.

Information-Processing Approach

The information-processing approach is a cognitive framework that examines how humans encode, process, store, and retrieve information, similar to the operations of a computer.

Passive Participant

Refers to an individual engaging in an activity or experiment with minimal involvement or without actively influencing the outcome or process.