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The management of the Raphael Bank is debating on the proper capital structure of the bank. A few of the senior staff suggest that it
The management of the Raphael Bank is debating on the proper capital structure of the bank. A few of the senior staff suggest that it is better to increase the liabilities by increasing borrowed funds, while another group of staff suggest that it is better to increase the shareholders equity. Explain three major differences between the two sources of fund from the perspective of the bank.
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