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Which of the following is a benefit of debt to the firm:

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Which of the following is a benefit of debt to the firm:

 Options:

A. interest and principal obligations are contractually set
B. interest payments are tax deductible
C. indenture agreements provide the firm with no restrictions
D. used beyond a certain point, debt will decrease the cost of capital

 

The Correct Answer Is:

  • B. interest payments are tax deductible

 

Conclusion

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