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Debt versus equity

Discuss how a company decides on its debt versus equity structure.

If you do not have an example from work, provide an example from your personal experiences (such as a company you have invested in or even how a family can make this decision for an individual household.)

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Debt versus equity
Discuss how a company decides on its debt versus equity structure.
If you do not have an example from work, provide an example from your personal experiences (such as a company you have invested in or even how a family can make this decision for an individual household.)

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Debt has certain features - such as a fixed cost and general non-involvement in affairs. It is also temporary - it will be paid back.

Equity has different features - such as flexibility to miss a year of returns but it also generally has rights to vote on governance (board of directors) and will ...

Solution Summary

Your response is 335 words and discusses the way we decided whether to use debt or equity for real estate ventures. Taxes are mentioned but were not a feature for the real estate ventures discussed.

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