A significant disadvantage of financing with debt rather than shares is the fact that the interest expense on debt is not tax-deductible.

Name: A significant disadvantage of financing with debt rather than shares is the fact that the interest expense on debt is not tax-deductible.
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Question

Quizplus · Accepted Answer

Interest expense on debt is actually tax-deductible, which can reduce the overall tax liability of a company, unlike dividends on shares which are not tax-deductible.

A Significant Disadvantage of Financing with Debt Rather Than Shares