Which of the following is NOT a benefit of debt financing from the acquirer's prospective?

Question

Quizplus · Accepted Answer

Lack of covenants is not a benefit of debt financing from the acquirer's perspective. Covenants are the terms and conditions set by the lenders that the borrower has to follow, failing which the lender can take appropriate actions. While covenants protect lenders, they may limit the freedom of the borrower. On the other hand, EPS accretion, tax deductibility, and return on equity are benefits of debt financing as they can help increase profitability and shareholder value.

Which of the Following Is NOT a Benefit of Debt