Under Federal tax law, a bias for corporate issuers exists in favor of debt as compared to equity when financing the operations of a corporation.

Name: Under Federal tax law, a bias for corporate issuers exists in favor of debt as compared to equity when financing the operations of a corporation.
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This bias exists because interest payments on debt are tax-deductible for corporations, reducing taxable income, whereas dividends paid on equity are not deductible and are paid from after-tax income.

Under Federal Tax Law, a Bias for Corporate Issuers Exists