Issuing debt is less expensive than issuing stock.

Name: Issuing debt is less expensive than issuing stock.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Issuing debt is less expensive than issuing stock because debt typically has a lower cost of capital compared to equity, meaning that the interest payments on debt are usually lower than the dividends paid to stockholders. Additionally, issuing debt does not dilute ownership or voting rights in the company, which can be a concern for existing shareholders.

Issuing Debt Is Less Expensive Than Issuing Stock