Generating Capital by Means of Debt Financing

question 181

Multiple Choice

Generating capital by means of debt financing:

• A) Involves borrowing money, either from a bank loan or from the use of corporate bonds.
• B) Means that the firm borrowing the money will have to pay interest charges.
• C) May be worth it if the borrowed money is used to implement a marketing plan that earns a return greater than the cost of borrowing the money.
• D) Means that the firm will have to put up some of its assets as a loan guarantee.
• E) All of the above.

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