What are pros and cons of the various sources of capital?

Finance Dec 18, 2020

Expert Solution

Please see the chart below for the breakout between capital positives and negatives:

Type of Financing	Pros	Cons
Loans	Instant Access to Money; easy to acquire; Retain Ownership of business	Must pay it back monthly, with interest
Issue Stock	Access to Money; entice more investors to the company	Lose out on potential control of the company
Issuing Bonds	Access to Money; Retain ownership of business	Must pay back both principal and interest on a routine basis

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