The most immediate goal of a company once it becomes highly leveraged is to
A) make an operating profit.
B) purchase additional assets.
C) restructure its logistics systems.
D) service the debt.

Question

Quizplus · Accepted Answer

Once a company becomes highly leveraged, its primary goal is to service the debt by making regular interest and principal payments to its creditors. Failure to do so may result in default, which could lead to severe consequences for the company such as bankruptcy or loss of ownership control. While making an operating profit and purchasing additional assets may be important long-term goals, servicing the debt is the most immediate and pressing concern for a highly leveraged company. Restructuring logistics systems may also be important for improving efficiency and reducing costs, but it is not directly related to addressing the company's leverage.

The Most Immediate Goal of a Company Once It Becomes