Accountancy, asked by dhruvverma6249, 1 month ago

Why is debt cheaper than equity?

Answers

Answered by atharvamishra24

0

Answer:

Cost of debt is used in WACC calculations for valuation analysis. is usually lower than the cost of equity (for the reasons mentioned above), taking on too much debt will cause the cost of debt to rise above the cost of equity. This is because the biggest factor influencing the cost of debt is the loan interest rate.

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