Course Home Content Assessments Communications Resources Table of Contents > Module 1: Financial Statements and Basic TVM > Ch 3_4 Ratios and Basic TVM > Finan Financial Leverage V Suppose you are a financial manager for a company and trying to decide how to finance some of the capital investment projects, say for $1 million. Obvious choices are either to borrow (debt) or to ask shareholders for more capital infusions (equity). What are the advantages and disadvantages of debt over equity financing? Hint: remember the ratio analysis; the effects of an increase of debt on income statement items, taxes, ROE, etc. You do not need to address all these effects. Your answers should be brief; no more than four sentences