The cost of debt financing results from
A) the agency costs of the lender's monitoring and controlling the firm's actions.
B) the costs associated with managers having more information about the firm's prospects than do investors.
C) the increased profitability of bankruptcy caused by debt obligations.
D) all of the above.

Question

Quizplus · Accepted Answer

The cost of debt financing includes agency costs related to monitoring, information asymmetry between managers and investors, and the risk of bankruptcy due to debt obligations.

The Cost of Debt Financing Results from