question archive Question 39 Which form of financing is riskiest but least costly for the firm: A
Question 39 Which form of financing is riskiest but least costly for the firm: A
Subject:FinancePrice:2.88 Bought3
| Question 39 | |||||
| Which form of financing is riskiest but least costly for the firm: | |||||
| A. Debt | |||||
| B. Preferred stock | |||||
| C. Common stock | |||||
| D. Trade credit | |||||
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Debt financing is always considered the riskiest form of Financing because it has financial distress cost associated with it and solvency risk also but they have interest tax shield which will mean that the interest payment are tax deductible in nature and which will be leading to lower cost.
All the other options are false.
Correct answer is option (A) Debt.
