Question
Debt verses Equity Exercise You are the owner of a company that is trying to raise 1.5 million, should you use debt or equity capital?
Debt verses Equity Exercise
You are the owner of a company that is trying to raise 1.5 million, should you use debt or equity capital?
Facts: Your company can borrow 1.5 million at an annual rate of 10%. Your company currently has 1.5 million in equity and no debt.
- List the pros and cons of both debt capital/equity capital.
- Explain the concept of leverage
- What will you do and why?
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Managerial Accounting
Authors: John J. Wild, Ken W. Shaw
2010 Edition
9789813155497, 73379581, 9813155493, 978-0073379586
