Why May Equity Finance Be Preferred to Debt Finance for Developing

Why may equity finance be preferred to debt finance for developing countries?

A) A fall in domestic income automatically reduces the earnings of foreign shareholders without violating any loan agreement.
B) There are laws insuring against any default with equity finance.
C) The risk is shared between debtor and creditor with debt finance.
D) The tax structure leaves equity finance unconstrained.
E) Repayments are unaffected by falls in real income.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free