Question

Bright Light Co. manufactures electrical appliances. Finance manager of the Company is

looking for a financial instrument which fulfulls his long term finance needs but has Tax

advantage to it. Suggest him which source of finance should he use. Give four advantages

of this source​

Answer 1

debt is more helpful for him

.it reduce tax

.cost of debt is less than equity

.when interst rate on debt is less ,then more debt is preferred

.if exesting share holder want to retain complete control of the business ,then debt is better for him.......