If debt financing is used in a for-profit corporation, more of a firm's operating income is available for distribution to investors (owners and creditors). The additional available operating income arises as a result of
Select one:
a. greater operating expenses
b. greater operating revenue
c. reduced operating expenses
d. lower dividends
e. tax savings

Respuesta :

If debt financing  is used in a for-profit corporation, more of a firm's operating income is available for distribution to investors (owners and creditors). The additional available operating income arises as a result of e. tax savings.

What is debt financing ?

Debt financing is the process through which a business sells debt instruments to retail and/or institutional investors in order to raise funds for working capital or capital expenditures.

It should be noted that the people or organizations receiving the funds become creditors and are given the assurance that the principal and interest on the loan will be paid back.

Therefore, option E is correct.

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