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Asked Aug 17, 2019
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Miranda is in the process of forming a corporation. She wants to capitalize it with $5,000,000. Are there any advantages to loaning some of the money to the corporation? Are there any limitations to this tactic?

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Answer:

The advantages of loaning the corporation are:

  1. Fixed interest rate: The lender will be entitled to receive a fixed interest income at a predetermined interest rate.
  2. Risk diversification: If someone provides l...

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