Which of the following is a benefit of using debt over equity as a source of long-term financing?
A)Interest on debt is tax deductible.
B)An increase in the use of debt makes a company less risky.
C)Debt financing may contain covenants that help management manage the company.
D)Interest payments on debt may be deferred.

Question

Quizplus · Accepted Answer

Interest on debt is tax deductible, which can lower a company's tax burden and improve its financial flexibility.

Which of the Following Is a Benefit of Using Debt