Is cost of debt cheaper than cost of equity for a business?

Which would be cheaper for a business between cost of debt and cost of equity?

  • user image

    No Name

    Customarily, it should be the cost of debt as debt holders have less default risk than shareholders being that they are more senior as regards being claimants of the business. The business can further benefit from an interest tax shield because interest is in most cases, tax deductible, which lowers the "actual" interest expense before you get to net income

    2019.08.01 18:0

    Please leave your knowledge and opinion!

    Related Forums

    Short term loans

    What is the wildest thing you have ever done with your money?

    What would you consider as the most dishonest thing you have ever experienced in your working life?

    Should I buy a house for my boyfriend?

    As a foreigner in this country I want to try shopping local goods.

    Wrong punching of product in a store