Which of the following observations concerning debt financing is NOT TRUE?
A) The cost of borrowing money can be a real financial burden.
B) The impact of interest charges on prices is negligible.
C) Most commercial banks are conservative.
D) The greater the risk that the lender takes on, the greater the interest rate charge will be.
E) It might involve a loan from a commercial bank or the use of corporate bonds.

Question

Quizplus · Accepted Answer

The impact of interest charges on prices can actually be significant, as businesses may need to increase prices to cover the cost of borrowing money through debt financing.

Which of the Following Observations Concerning Debt Financing Is NOT