What are the advantages and disadvantages of debt vs. equity financing from the companys perspective?
Debt financing is usually a more predictable expense for the company and once the bonds mature they can be issued in a new series and therefore the company can obtain more financing. Bonds can also include buyback clauses and help a company to establish creditbility amoung the investment community. Equity financing is more of a one time cash infusion for the company and is less predictable if the stock price fluctuates a lot. Sotcks also expose a company in ways that debt does not. For example you could purchase all the outstanding stock and then you will own the company and can gain control over its operations or liquidate it.
