Multiple choice

Directions: Choose the correct option for the given question: Raising of funds through debentures is cheaper as compared to raising of funds through shares.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Debentures are a form of debt, and interest payments are tax-deductible, making them generally cheaper than equity, where dividends are paid out of post-tax profits and carry a higher risk premium.

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