Question
Firms do not think they should raise money through equity issue (share issuance) just because it is risky to borrow money. This is because of
Firms do not think they should raise money through equity issue (share issuance) just because it is risky to borrow money. This is because of several reasons. First of all, in terms of cost, 1. ________ is considered to be the most costly among financing options. Meanwhile, higher 2. ________ resulting from more borrowing allows firms to control more assets with a certain amount of shareholders' equity. This is important, because issue of new shares results in the 3.______ of existing shareholders' rights. Moreover, increased borrowing will flatter 4._____ and also allows firms to pay less 5.______
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