Which of the following is not a significant advantage of debt financing over the issue of ordinary shares?
A) Shareholder control is not affected.
B) The current owners retain control of the company.
C) Tax savings occur as interest on debt is deductible for tax purposes.
D) Return on equity is likely to be lower.

Question

Quizplus · Accepted Answer

Reduced return on equity is not a significant advantage of debt finance over share issues.

Which of the Following Is Not a Significant Advantage of Debt