Which of the following statements is not true?
A)Debt may be the only available source of funds to a company.
B)Historically, debt financing has a higher cost than equity financing.
C)Debt financing offers an income tax advantage.
D)Debt does not dilute ownership interests.

Question

Quizplus · Accepted Answer

Historically, equity financing has a higher cost than debt financing. This is because equity investors expect a higher rate of return to compensate for the higher risk they take on.

Which of the Following Statements Is Not True