Which two statements best describe the costs of equity when compared with the cost of debt capital?

Question

Quizplus · Accepted Answer

Debt finance is less risky for investors because they have a higher claim on assets in case of liquidation, and it often comes with fixed interest payments. Debt finance can be less expensive for companies due to tax-deductible interest payments and typically lower required returns compared to equity.

Which Two Statements Best Describe the Costs of Equity When