Considering That Issuing Debt Is Cheaper Than Issuing Equity; That

question 171

Essay

Considering that issuing debt is cheaper than issuing equity; that debt is a less expensive form of financing; and that debt issues tend to be larger in size, why do firms have secondary equity offerings? Why not just issue debt securities once the IPO is complete?

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Definitions:

Persuasion

The act or process of influencing someone's beliefs, attitudes, or behaviors through argument, reasoning, or appeal.

Electronic Media

Platforms or channels that use electronic technology for the broadcast or distribution of information, such as television, radio, and the internet.

Direct Messages

Private messages sent between users on social media platforms, not visible to others.

Persuasive Claim Messages

Content designed to convince or influence someone to take a specific action or adopt a particular viewpoint.