The major advantage of debt financing is which of the following?
A) the absence of factoring
B) the number of different sources from which it is available
C) the deductibility of interest expenses
D) the lack of dependence on collateral

Question

Quizplus · Accepted Answer

The deductibility of interest expenses is a major advantage of debt financing as it reduces a company's tax liability. This allows the company to retain a larger portion of its earnings and potentially reinvest in the business. Additionally, interest payments are fixed and predictable, making it easier for a company to budget and plan for its financial obligations. While the other options may have some advantages, they do not compare to the tax benefits and stability of interest payments offered by debt financing.

The Major Advantage of Debt Financing Is Which of the Following