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In the absence of taxes, the value of a firm is the same with debt financing as it is with equity financing because Blank______. Multiple select question. equity financing is actually better than debt financing debt financing is actually better than equity financing MM demonstrated that debt financing is neither better nor worse than equity financing in the absence of taxes the asset to be financed is the same

Sagot :

  • MM demonstrated that debt financing is neither better nor worse than equity financing in the absence of taxes
  • the asset to be financed is the same

What is debt financing?

Debt financing is the process through which a business sells debt instruments to retail and/or institutional investors in order to raise funds for working capital or capital expenditures. The people or organizations receiving the funds become creditors and are given the assurance that the principal and interest on the loan will be paid back. The other method of raising money in the debt markets is by issuing stock in a public offering; this process is known as equity financing.

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