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    Debt is _______________ but is more _______________ for a business because the payment of interest and the return of principal is obligatory for the b
    Question

    Debt is _______________ but is more _______________ for a business because the payment of interest and the return of principal is obligatory for the business.

    A.

    Cheaper, risky

    B.

    Cheaper, safe

    C.

    Expensive, risky

    D.

    Expensive, safe

    Correct option is A

    Debt is generally cheaper because interest payments on debt are tax-deductible. However, it is riskier because the business must meet its obligations to pay interest and principal, regardless of its financial performance.

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