Why might a company choose to increase its debt rather than issue stock?
A) to limit the potential rate of return to owners
B) to require owners to give up some voting control
C) to reduce financial risk
D) to retain full ownership and control

Question

Quizplus · Accepted Answer

Issuing debt instead of stock allows a company to raise capital without diluting ownership or giving up any control to new shareholders.

Why Might a Company Choose to Increase Its Debt Rather