Under what condition(s) would equity financing be more preferred than debt financing from the viewpoint of bank shareholders?

Question

Quizplus · Accepted Answer

Equity financing might be more preferred over debt financing when the level of interest rate is relatively high, as the cost of borrowing increases, making debt financing more expensive. Additionally, if the bank's marginal tax rate is very low, the tax deductibility advantage of debt interest payments diminishes, making equity financing more attractive.

Under What Condition(s) Would Equity Financing Be More Preferred Than