Debt Displacement Is Associated with Leases Because

Debt displacement is associated with leases because:

A) all assets not purchased with equity use debt financing.
B) debt is always a cheaper source of financing and preferred to equity financing.
C) FASB 13 and the IRS mandate debt displacement.
D) lease financing is all debt and causes an imbalance in the optimal debt to equity ratio which reduces future debt financing.
E) None of these.

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