Which of the Following Is a Major Advantage of Debt

question 48

Multiple Choice

Which of the following is a major advantage of debt financing?

• A)Market interest rates on debt normally do not exceed 5 percent, which is much lower than market rates associated with common stock.
• B)Interest payments on debt are a tax-deductible expense to the issuing firm.
• C)Generally, interest payments on debt are based on the firm's net income, which means the interest is not paid unless the firm has enough income to cover the payments.
• D)Normally the market values of bonds remain fairly stable, whereas common stock prices change substantially every day.
• E)Firms that use great amounts of debt do not pay much in corporate taxes.

Understand the key elements and best practices for summarizing documents and conversations for internal communication.

Identify the most effective strategies for opening and concluding business correspondence, including letters and emails.

Recognize the importance of appropriate subject lines and how they preview the message content.

Apply the principles of PAIBOC analysis to improve communication clarity and effectiveness.

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Definitions:

Recently Viewed Items

Recently viewed items refer to a digital feature that tracks and displays products a customer has looked at in the past, enhancing the online shopping experience.

Entice

To attract or tempt someone into doing something or engaging in some activity by offering potential benefit or pleasure.

Perceived Benefit

The personal value or advantage that consumers believe they will receive from using a product or service.

Universal Set

Includes all possible choices for a product category.