One factor that influences the choice between debt and equity is the
A) state of the economy.
B) risk of nationalization.
C) degree of control the owners hope to retain.
D) state of the owners' estate plan.

Question

Quizplus · Accepted Answer

The degree of control the owners hope to retain is a key factor in determining whether to choose debt or equity. Equity provides ownership in the company and therefore more control, while debt does not grant ownership but does require repayment with interest. If owners prioritize retaining control, equity may be the better choice.

One Factor That Influences the Choice Between Debt and Equity