An advantage of using debt is that:
A)debt-holders have no control over the company's operations.
B)debt-holders usually exert no control over the company's operations.
C)interest payments are fixed.
D)a company may borrow without the security of an asset.

Question

Quizplus · Accepted Answer

Debt-holders usually do not have control over the company's operations, which allows the company to maintain its autonomy. Additionally, interest payments are typically fixed, which allows for easier budgeting and forecasting. While a company may be able to borrow without the security of an asset, this is not necessarily an advantage as it increases the risk for both the borrower and the lender.

An Advantage of Using Debt Is That