Who takes on more risk with debt financing; the investor or the company?
1. “As a shareholder, there is no boundary to how much you profit since your returns are not assured.” Who takes on more risk with debt financing; the investor or the company? What about with equity financing? Why?2. stocks, the company can “raise capital at a much lower rate, because no fixed costs are needed.” What is the cost of equity financing?3. IBM ” is considered a safe stock because it is a well-established company with a long history. “While there is value to being established long-term, have there been any similarly historical companies that have not made it? Why might we hope that IBM would be different?
