Why do companies issue long term liabilities?
A) The company desires the income tax advantages
B) Increase the company's leverage
C) Debt is less costly than issuing equity
D) All of these choices

Question

Quizplus · Accepted Answer

Companies issue long term liabilities for all of these reasons. They may want the income tax advantages of deducting interest expense, they might want to increase their leverage to boost returns for shareholders, and debt can often be a less expensive way to raise funds compared to issuing equity.

Why Do Companies Issue Long Term Liabilities