Glenda is trying to decide between the use of debt and the use of equity to finance her young business. She should remember that
A) her return on assets will be less if she uses debt financing.
B) using other people's money to finance one's business is seldom a good idea.
C) the lender will have partial control of the business.
D) debt must be repaid even if the company does not make a profit.

Question

Quizplus · Accepted Answer

Debt financing requires repayment regardless of a company's profit levels, distinguishing it from equity financing where investors share in the profits and losses.

Glenda Is Trying to Decide Between the Use of Debt