What are the advantages of debt financing?
Debt financing allows businesses to access capital without giving up ownership. It can also provide tax benefits.
Can you explain how tax benefits work with debt financing?
Sure! Interest payments on debt are often tax-deductible, which can lower a company's taxable income.
Are there any risks associated with debt financing?
Yes, excessive debt can lead to financial strain and increased risk of bankruptcy if the business cannot meet its obligations.
How does debt financing compare to equity financing?
Debt financing requires repayment and interest, while equity financing involves giving up a share of ownership. Each has its pros and cons.
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