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ABC company wishes to raise extra capital in order to take on a new project that requires a large capital expenditure. ABC company will raise
ABC company wishes to raise extra capital in order to take on a new project that requires a large capital expenditure. ABC company will raise capital by either adding debt or raising equity Which of the following are true statements that ABC company should consider? a) A con of financing the expenditure with debt is that ABC company has to pay interest for the cash borrowed O True O False b) Another con of financing the expenditure with debt is that ABC company's Earnings Per Share will decrease. O True O False c) Another con of financing the expenditure with debt is that with additional debt, ABC company could appear riskier to lenders and will likely have to pay higher interest rates on what is borrowed. O False O True d) A benefit of financing the expenditure with equity is that ABC company doesn't have to pay interest on the capital raised O True O False e) Another benefit is that equity financing is a flexible category including many different types of business loans, with short-term and long-term repayment options available. O True O False
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