Equity and Debt Financing Example Problem

1. If a firm has issued bonds to help finance the company's expansion, why would market interest rate changes continue to be a concern for the company after the sale of bonds?

2. If you had your choice, would you choose equity or debt to finance your company's capital requirements? Defend your choice and include risk concepts.

3. Why is a high break-even point a risk for a company?

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...ge is a good indication for the market about the risk a company represents as an investment and how well, financially, the enterprise is run.

2. If you had your choice, would you choose equity or debt to finance your company's capital requirements? Defend your choice and include risk concepts.

Equity is the share of ownership of the enterprise and is a risk issue for enterprises because of the ...