Write a 700- to 1,050-word paper in which you explain roles of
If I were establishing my own business, I would choose to use debt financing instead of equity financing under certain circumstances. For example, if the business needed capital quickly and had a plan in place for how it was going to be used efficiently and effectively, then taking on debt may be the best option to get started. Additionally, if the business had predictable cash flows that could support repayment of any loans taken out then this could also make debt financing more attractive than issuing shares. Moreover, taking on debt may offer tax benefits as interest payments can usually be deducted from income taxes while dividends paid to shareholders are not deductible.
On the other hand, there are some situations where equity financing may be preferable over debt. For instance, if there is a need for long-term capital or access to external expertise/networks due to lack of experience within the company then issuing shares in exchange for investments can provide these advantages without having to worry about repaying loans. It is also important to consider any personal preferences which may play into your decision as well; for example an individual may prefer not take on large amounts of risk through borrowing money so they opt for issuing stock instead. Ultimately whether one chooses debt or equity should depend upon their particular situation but with proper consideration both options have potential risks rewards associated them.