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Capital structure is important for company's performance. Based on your knowledge , why multinational companies prefer debt rather than the equity?

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Question added by Ahmed Hassan Hadi , Teller , Amal Express
Date Posted: 2015/08/25
Oluseun Kehinde
by Oluseun Kehinde , Regional Accountant , Regency Alliance Insurance Plc

Debt as a form of capital has a fixed interest rate and irrespective of any profit made, this can not be increased. As a result of this, most multinational companies that make big profit, big enough to cover any interest will prefer to take debt as a capital since its cost is fixed right from the point of taking it.

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