QUESTION 7 All of the following statements are true except: Failure to satisfy t

Question

QUESTION 7 All of the following statements are true except: Failure to satisfy the fixed charges associated with debt will ultimately result in bankruptcy. trve dificulty A firm with too much debt may have difficulty obtaining additional debt financing when needed or finds tht rt s ilable only that credit is available only at extremely high rates of interest. Having debt is always risky and does not provide increased benefits to the firm's owners. The amount and proportion of debt in a company's capital structure is extremely important to the financial analyst because of the trade-off between risk and return.

Explanation / Answer

Having debt is always risky and does not provide increased benefits to the firm's owners is not ture. Option 3 is correct

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