According to the trade-off theory, which of the following is the least expensive form of financing?
A) Common stock
B) Preferred stock
C) Corporate debt
D) Retained earnings
E) Government subsidies

Question

Quizplus · Accepted Answer

Corporate debt is generally considered the least expensive form of financing due to the tax deductibility of interest payments, which reduces the effective cost of borrowing.

According to the Trade-Off Theory, Which of the Following Is