Which of the following statements is FALSE in regard to borrowing money?
A) Interest expense on a loan may impact prices and profits.
B) A company with a successful marketing strategy has its own internal source of fund--profits.
C) Institutions that loan money are usually more willing to take a risk than are investors who buy stock.
D) The firm may be able to sell stock to its own employees.
E) None of the above is false.

Question

Quizplus · Accepted Answer

Generally, institutions that loan money are less willing to take risks than investors who buy stock. This is because lenders have a fixed return on their investment through the interest rate on the loan, whereas stock investors have the potential for higher returns but also the risk of losing their investment.

Which of the Following Statements Is FALSE in Regard to Borrowing