Several reasons why small businesses use debt financing

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There are several reasons why small businesses use debt financing, in spite of the risks involved. Which of the following is NOT one of those reasons?

a. The interest cost of debt is usually lower than the cost of outside equity, and interest payments are tax-deductible expenses.

b. By employing debt funding, an entrepreneur may be able to raise more capital than from equity sources alone.

c. Since debt payments are fixed costs, any remaining profits belong solely to the common stockholders.

d. Debt financing gives investors a voting interest.

e. All of the above are advantages of debt financing.

Reference no: EM131367132

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