FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Please explain one advantage and one disadvantage of financing a company with debt.
Advantage Disadvantage
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- The for an organization is the cost of financing its activities through debt or equity.arrow_forwardIn general, debt financing is _______ than equity financing. A firm’s ______ has priority in claiming the company’s assets. Question 17 options: 1) less costly, shareholders 2) less costly, lender 3) more costly, shareholders 4) more costly, lenderarrow_forwardA company may choose to finance its operations or certain projectts by the means of either debt or equity. explain the diffetence between these two methods and give at least two examples of each.arrow_forward
- Which of the following is most consistent with using debt to reduce agency costs or conflicts? Question 11 options: Increasing debt reduces a firm’s business risk The interest paid on debt reduces taxable income and income taxes The interest paid on debt reduces cash that management of a firm might otherwise waste or use poorly The issuance of debt helps firms increase their credit ratingarrow_forwardIs debt good for a company? Why or Why not?arrow_forward
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