Which of the following is not an advantage of issuing long-term debt?
A)The stockholders do not relinquish any control.
B)The interest is tax-deductible.
C)The risk of becoming bankrupt is reduced.
D)Increased earnings accrue to the stockholders.

Question

Quizplus · Accepted Answer

Issuing long-term debt increases a company's financial leverage, which can increase the risk of bankruptcy if the company is unable to meet its debt obligations. Choices A, B, and D are generally considered advantages of issuing long-term debt.

Which of the Following Is Not an Advantage of Issuing