Debt financing is more risky than financing with equity.

Name: Debt financing is more risky than financing with equity.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Debt financing is considered more risky because it requires regular interest payments and the repayment of principal regardless of the company's financial situation, whereas equity financing does not require regular payments and the investors bear more of the risk if the company underperforms.

Debt Financing Is More Risky Than Financing with Equity