What are some of the reasons why a company would choose debt financing over other alternatives,...

Question

Question

What are some of the reasons why a company would choose debt financing over other alternatives, such as issuing stock, etc.?

Answer 1

Answer #1

1.
The company does not want to dilute ownership

2.
Interest is tax deductible

3.
Debt is cheaper than other sources

4.
There are multiple options-short term and long term

5.
Once debt is paid off, there is no obligation

6.
Allows leverage a small amount of money into a much larger sum

Answer 2

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