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What is a reason for corporations to use debt in capital financing?
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19 votes
19 votes
What is a reason for corporations to use debt in capital financing?

User Illya
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1 Answer

15 votes
15 votes

Preserve company ownership

The main reason that companies choose to finance through debt rather than equity is to preserve company ownership. In equity financing, such as selling common and preferred shares, the investor retains an equity position in the business.
User Gozwei
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