Which ONE of the following statements is FALSE regarding
debt financing?

a) Interest relating to
debt financing can be deducted from taxable income .

b) Debt requires repayment of
capital and interest .

c) The
cost of obtaining some kinds of debt is lower than the cost of issuing ordinary
shares .

d) Deb t financing does not influence
the risk profile of an organisation .

Question

Which  ONE of the following statements is FALSE regarding
debt financing?

a)   Interest  relating to
debt financing can be deducted from taxable income .

b)   Debt  requires repayment of
capital and interest .

c)   The 
cost of obtaining some kinds of debt is lower than the cost of issuing ordinary
shares .

d)   Deb t financing does not influence
the risk profile of an organisation .

Answer

Interest relating to debt financing can be deducted from taxable income.

Answer

Debt requires repayment of capital and interest.

Answer

Debt financing does not influence the risk profile of an organisation.

Answer

The cost of obtaining some kinds of debt is lower than the cost of issuing ordinary shares

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