Debt capital is always preferable to equity capital.

Question

Quizplus · Accepted Answer

This statement is not universally true as the preference for debt or equity capital depends on various factors such as the current financial position of the company, the desired level of control, risk tolerance, tax implications, and more. Debt capital may be preferable if the company has consistent cash flows and wants to maintain ownership control, while equity capital may be preferable if the company is in a growth phase and wants to raise funds without incurring debt.

Debt Capital Is Always Preferable to Equity Capital