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> the actual action in and of itself makes no sense from a business perspective. It’s not a business decision, it’s a financial decision. Why do companies go i
by kgwgk 7y ago
> the actual action in and of itself makes no sense from a business perspective.
It’s not a business decision, it’s a financial decision. Why do companies go into debt at all instead of financing their operations with equity only?
- dlp211 7y agoRisk mitigation. Financing operations in good times allows me to run my company in a downturn with cash on hand when lending tightens up. Financing paying shareholders is the opposite of this.
- kgwgk 7y agoThat doesn’t answer the question. Why debt and not equity? Both can be used to raise cash.