Question
An investment banker approaches you and argues that equity is cheaper than debt because debt requires the firm to pay interest and principal payments, while
An investment banker approaches you and argues that equity is cheaper than debt because debt requires the firm to pay interest and principal payments, while with equity the firm can choose whether or not to pay dividends. Therefore, he says, your firm should take advantage of this and finance with equity. Do you agree? Why or why not?
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Business Analysis And Valuation Using Financial Statements Text And Cases
Authors: Krishna G. Palepu, Paul M. Healy, Victor Lewis Bernard, W.Gordon Filby
2nd Edition
0324015658, 9780324015652
