In the U.S.,firms that need to raise capital externally,prefer to issue

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Firms that need to raise capital externally prefer to issue debt because it provides a tax-deductible interest payment, whereas dividends paid on common or preferred stock are not tax-deductible. Additionally, issuing debt does not dilute ownership of the firm like issuing stock would. Lastly, debt holders have a lower priority claim on the firm's assets in case of bankruptcy, which makes it less risky for the firm.

In the US,Firms That Need to Raise Capital Externally,prefer to Issue