Question
Why was carrying so much debt a problem for Toys ‘R’ Us?
(1 point)
Responses
It forced them to move to smaller retail space.
It forced them to move to smaller retail space.
Managers were unaware of how much debt there was.
Managers were unaware of how much debt there was.
It could not afford adequate marketing due to the debt.
It could not afford adequate marketing due to the debt.
The interest payments were using up a substantial amount of revenue.
The interest payments were using up a substantial amount of revenue.
1 answer
The correct response is:
The interest payments were using up a substantial amount of revenue.
This was a significant issue for Toys 'R' Us, as high debt levels from a leveraged buyout resulted in large interest payments that limited the company's ability to invest in other areas, such as marketing and store updates.
