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1 . Which of the following is true about debt financing? The interest on debt is allowed as a deduction from net income only when
Which of the following is true about debt financing? The interest on debt is allowed as a deduction from net income only when the company has been earning profit consecutively for three years. If a company uses debt to finance any project, the company is restricted from issuing shares for the next three years. A company that uses debt to finance any project is required to repay the debt on time and as per a specific schedule. If a company uses debt to finance any project, the company must use the return from the project to repay the lenders only. An advantage of debt financing is the borrower cannot be forced by lenders to repay the debt the borrower is required to pay the lenders only if the borrower earns profit the borrower can deduct the principal amount from its income to calculate the tax amount the borrower can deduct the interest expense from its income to calculate the tax amount
Which of the following is true about debt financing?
The interest on debt is allowed as a deduction from net income only when the company has been earning profit consecutively for three years.
If a company uses debt to finance any project, the company is restricted from issuing shares for the next three years.
A company that uses debt to finance any project is required to repay the debt on time and as per a specific schedule.
If a company uses debt to finance any project, the company must use the return from the project to repay the lenders only.
An advantage of debt financing is
the borrower cannot be forced by lenders to repay the debt
the borrower is required to pay the lenders only if the borrower earns profit
the borrower can deduct the principal amount from its income to calculate the tax amount
the borrower can deduct the interest expense from its income to calculate the tax amount
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