What is the major drawback of debt financing? Select one: You have to pay back the money Increasing debt changes the gearing ratio of the firm Interest payments must be made before shareholder dividends and irrespective of fluctuations in profits Lenders often require security of the loan against assets of the company

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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5.What is the major drawback of debt financing?

Select one:

You have to pay back the money


Increasing debt changes the gearing ratio of the firm


Interest payments must be made before shareholder dividends and irrespective of fluctuations in profits


Lenders often require security of the loan against assets of the company

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