The larger the volume of new financing, the greater the risk and, thus, the higher the financingcosts.

Name: The larger the volume of new financing, the greater the risk and, thus, the higher the financingcosts.
Brand: Quizplus
Rating: 4.8 (38 reviews)

Question

Quizplus · Accepted Answer

This statement is true. The more financing a company takes on, the more debt it has and the higher the risk to its lenders. As a result, the lenders will charge higher interest rates to compensate for the increased risk.

The Larger the Volume of New Financing, the Greater the Risk