Debt vs Equity Extra Credit

Debt vs Equity Extra Credit - Debt vs Equity Extra Credit...

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Debt vs. Equity Extra Credit MGMT 3125 Debt Vs. Equity In the business world there are all kinds of ways to get capital but some are better than others. Two of the main ways that companies raise capital is by debt, which is just taking out loans from a bank or investor, or equity, which is the selling of shares of the company to investors. o Debt is the borrowing of money with the intent to pay it back plus interest. o Equity is the trading of money for a share of business ownership, and has no real debt to be paid, although it does have some disadvantages. As with all things in the business world, there are pros and cons to both, and the goal of a company is to decide which is better for the company and their finances. It all depends on the company on how they would like to invest their money but it seems to be the best choice to try and get a good balance. The pros to debt over equity are: Interest rates are tax deductible. Debt has virtually no impact on the ownership or control of the company.
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Debt vs Equity Extra Credit - Debt vs Equity Extra Credit...

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