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Debt Is Often Considered to Be Generally Less Expensive Than

Question 32

Multiple Choice

Debt is often considered to be generally less expensive than equity because:


A) debt costs less to acquire than equity.
B) the transactions costs associated with debt are generally less than those associated with equity.
C) dividends are tax-deductible.
D) interest payments on debt are tax-deductible and reduce the payor's taxable income.

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