Because insurance provides cash to the firm to offset losses,it can reduce the firm's need for external capital and thus reduce ________ costs.

Name: Because insurance provides cash to the firm to offset losses,it can reduce the firm's need for external capital and thus reduce ________ costs.
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Question

Quizplus · Accepted Answer

Insurance can reduce the firm's need for external capital, thereby reducing issuance costs, which are the costs associated with issuing new securities to raise capital.

Because Insurance Provides Cash to the Firm to Offset Losses,it