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Debt Equity Ratio Why is debt a comparatively cheaper form of finance than equity?

The debt of a company is sum of money owed to the company from different sources. In contrast, equity refers to the portion of a company's assets that the shareholders own. To sell stock in a company the company must be advertised publicly, if the shareholders extend beyond those of the company's immediate administrators, which can cost money, and also results in more outside control and administrative costs to the business

If debt is cheaper than equity, why do companies approach the equity markets?

In such a debt-based scenario, the different...

Also, the act of selling stock can act as a form of positive public relations for a company, generating interest in its product or service.
Can one minimize WACC when there is a constraint on raising debt? If so, how?

The weighted average cost of capital, or WACC, is minimized when the company increases its sale of common stock and other forms of equity. If the equity markets are rising in the firm's favor, then WACC can still be kept under control.

What are the effects of a corporate tax on the WACC of a business?

WACC is the average of…

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