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 issuance costs because it lessens the need for a company to seek external financing to cover losses, which often involves costs related to issuing new equity or debt.

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