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Basic Question 1 of 19

In general, for a start-up company, debt financing is:

A. attractive to its lenders.
B. appealing to the company.
C. neither A nor B is correct.

User Contributed Comments 2

User Comment
aishaoh what? i thought debt financing is cheaper than equity???
breh @aishaoh: not always. for such companies there's no positive income and debt financing could be very expensive.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

Learning Outcome Statements

explain factors affecting capital structure and the weighted-average cost of capital

CFA® 2025 Level I Curriculum, Volume 2, Module 6.