Question: What is the basic reason why debt financing affects the income available to asset funders? Multiple choice question. Taxes increase when debt financing replaces equity

What is the basic reason why debt financing affects the income available to asset funders?
Multiple choice question.
Taxes increase when debt financing replaces equity financing.
Interest is excluded from the income available to asset funders.
Shareholders are asset funders but creditors are not.
Interest is a tax-deductible expense.

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