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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