Corporations tend to shift from debt financing to equity financing during bull markets.

Question

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During bull markets, corporations tend to have more profits and positive outlooks, which makes it easier for them to raise funds through equity financing (such as issuing stocks). On the other hand, during bear markets, when profits may be lower and outlooks more uncertain, corporations may shift towards more debt financing (such as taking out loans) as a way to raise funds.

Corporations Tend to Shift from Debt Financing to Equity Financing