A major disadvantage for shareholders, of using debt financing, is:
A) shareholder control is altered.
B) interest is not deductible for tax purposes.
C) debtholders assume full control of the company.
D) the company is locked in to fixed payments of interest and principal.

Question

Quizplus · Accepted Answer

Debt finance locks a company into fixed payments of interest and principal regardless of how well the company is performing.

A Major Disadvantage for Shareholders, of Using Debt Financing, Is