Acquiring funds through debt financing actually decreases the overall risk of the firm.

Name: Acquiring funds through debt financing actually decreases the overall risk of the firm.
Brand: Quizplus
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Question

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Acquiring funds through debt financing increases the overall risk of the firm as the company now has to make regular payments with interest, which can become a burden on the company's cash flow. Failure to make these payments can lead to default, which further increases the financial risk.

Acquiring Funds Through Debt Financing Actually Decreases the Overall Risk