Effective cost of debentures is _________ as compared to shares.

As a result of these factors, debentures are a lower-cost form of financing than shares.

Here is a brief explanation of each option:

• Option A: higher. This is incorrect because debentures are a lower-cost form of financing than shares.
• Option B: lower. This is the correct answer because debentures are a lower-cost form of financing than shares.
• Option C: equal. This is incorrect because debentures are a lower-cost form of financing than shares.
• Option D: medium. This is incorrect because debentures are a lower-cost form of financing than shares.