Both debt and equity have equal amount of risk."" Comment. – InterviewSolution

1.	Both debt and equity have equal amount of risk."" Comment.
Answer» Debt FINANCING While debt does not dilute OWNERSHIP, INTEREST PAYMENTS on debt reduce net income and cash flow. This reduction in net income also represents a tax benefit through the LOWER taxable income. Increasing debt causes leverage ratios such as debt-to-equity and debt-to-total capital to rise.I hope it will be helpful to you friend

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