Which of the following is true regarding a company assuming more debt?

Question

Quizplus · Accepted Answer

Assuming more debt can be good for the company as long as they earn a return in excess of the rate charged on the borrowed funds. This is because the company can use the borrowed funds to invest in projects that have a higher return than the interest rate on the debt, resulting in increased profits and shareholder value. However, assuming too much debt can also be risky and negatively impact the company's financial stability.

Which of the Following Is True Regarding a Company Assuming