Relying Primarily on Debt Financing Is Very Dangerous for a Company

question 35

Multiple Choice

Relying primarily on debt financing is very dangerous for a company because ________.

• A) creditors can force a company into bankruptcy or take over company property
• B) creditors can sabotage the business by refusing to lend it money
• C) creditors can gain a majority share of the company and take it over
• D) it can be very stressful for the owners, thus causing them to make mistakes

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Definitions:

Uterus

A muscular organ in the female reproductive system where a fertilized egg develops into a fetus.

Coiled Tube

A tube that is wound in a series of circular turns used in various applications, such as in heating or cooling systems.

Spermatids

Immature male gametes that form from the division of secondary spermatocytes during spermatogenesis in the testes.

Seminiferous Tubules

Narrow, coiled tubules within the testes where sperm production occurs.