Munschausen Is a German-Based Appliance Company That Is Preparing to Begin

Munschausen is a German-based appliance company that is preparing to begin international operations, wherein it plans to open several production facilities and sales centres abroad. The company needs a substantial amount of capital to start its international operations and needs to decide whether it should pursue debt financing by acquiring loans, or whether it can get equity financing from investors. Which of the following, if true, would weaken the case for Munschausen's seeking to acquire capital by equity financing?

A) The equity capital market in Europe is currently very strong.
B) Equity financiers expect a consistent return on their investments.
C) Many of the companies in Germany get financing from equity capital.
D) Only the largest companies are listed on Germany's public stock exchange.
E) Most of the companies in Germany are listed on its stock exchange.