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Signals of debt and equity financing

What signals are provided to investors when a company obtains equity financing? What signals are provided to investors when a company obtains debt financing?

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Debt financing
What signals are provided to investors when a company obtains equity financing? What signals are provided to investors when a company obtains debt financing?
Equity financing generally is considered as a negative signal when compared to debt as this kind of financing does not require compulsory payment of dividends and provides no commitment for the repayment of principal. The company may ...

Solution Summary

What the signals provided to investors when a company obtains equity financing are are determined. The signals provided to investors when a company obtains debt financing are given.

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