Which of the following is NOT one of the qualities which makes debt attractive to firms?Select one:a. The required return on debt is lower because, from the lender's point of view, debt is less risky than equity.b. It reduces the amount of corporate tax payable by firms by reducing the amount of taxable profit.c. Debt interest only gets paid when the company is making a profit.d. The cost of debt is generally less than the cost of share capital and hence can lower the overall cost of capital for a firm.

Which of the following statements is NOT TRUE?Debt is costlier than equity.For the same business the firm can choose between the use of debt capital versus equity capital.Net profit can be substantially higher if debt is usedAll of the above

Which of the following factors influence how much debt a firm should take on?1 pointIndustry normsThe nature of the firm’s assetsFinancial slackThe overall level of interest ratesAll of the above

Which of the following types of companies will most benefit from debtadding the discipline?a. Conservatively financed (very little debt), privately owned businessesb. Conservatively financed, publicly traded companies, with stocks held bymillions of investors, none of whom hold a large percent of the stock.c. Conservatively financed, publicly traded companies, with an activist andprimarily institutional holdings

Which of the following is not an advantage of debt financing? Group of answer choices Shareholder control is not affected. Interest payments are cheaper than dividend payments. The return on shareholder’s equity may be higher. Interest is deductible from income for tax purposes.

Which one of the following statements is true?Group of answer choicesLow debt ratio means most of the assets are financed by debt.Low debt ratio means most of the assets are financed by equity.Too little debt will reduce the business’s long-term flexibility.High debt ratio means most of the assets are financed by equity.