Which of the Following Is Not a Financial Advantage to Companies

question 29

Multiple Choice

Which of the following is not a financial advantage to companies using debt?

• A) Debt is paid back in "cheaper" dollars during inflationary periods.
• B) Bond holders have no control over the actions of management.
• C) The cost of debt can lower the weighted overall cost of capital.
• D) Interest payments are tax deductible.

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Definitions:

Confounding Variables

External factors that can affect the results of an experiment or study by being intertwined with the independent variable.

Correlational Study

Research design intended to discover whether a statistical relationship between variables exists.

Laboratory Experimental Approach

A research method in which variables are manipulated and controlled in a lab setting to study their effects on outcomes of interest.

Randomly Assign

A method used in experimental designs where participants are allocated to different groups without any systematic criteria, helping to minimize bias.