Which of the following statements is false?
A) Debt may be the only available source of funds to a company.
B) Debt financing typically has a higher cost than equity financing.
C) Debt financing offers an income tax advantage.
D) Debt does not dilute ownership interests.

Question

Quizplus · Accepted Answer

Debt financing typically has a lower cost than equity financing because interest payments on debt are tax-deductible, reducing the effective cost of debt. Additionally, debt does not involve giving up any ownership stake, unlike equity financing, which can make it a cheaper option for companies.

Which of the Following Statements Is False