debt equity discussion
Not what you're looking for? Search our solutions OR ask your own Custom question.
Consider the following statement by a financial manager: "Since we are financing our new manufacturing facility 100% with equity, we must evaluate it using a higher rate of return than we would if we financed a portion of the facility with debt." Do you agree? Why or why not? Be sure to fully explain the rationale behind your argument.
© BrainMass Inc. brainmass.com November 30, 2021, 12:08 am ad1c9bdddfhttps://brainmass.com/business/finance/debt-equity-discussion-22793
Solution Preview
My answer is "It depends.". Equity does not cost anything (if no dividends) or if there are dividends, usually less than paying interest on a loan. In this analysis, one would say that one should use a lower rate of return for ...
Solution Summary
Debt and equity are considered entities.
$2.49