College Name: Purdue University
Subject: Financial accounting
Course Code: FINACC33244
Title: Week 2 Assignment
Question 40538: Chapter nine covers long-term debt and chapter 10 covers stock. When companies raise money by borrowing money, we refer to this as debt financing and when companies raise money by issuing stock, we refer to this as equity financing. Why do investors and analyst generally view debt financing as more risky than equity financing? Give specific examples of characteristics associated with each type of financing.