What are the two best arguments against debt reduction (i.e., the cons)?
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What are the two best arguments against debt reduction (i.e., the cons)?
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- Why is the relevant cost of debt the interest rate on new debt, not that on alreadyoutstanding, or old, debt?Thinking about the definition of the term "flotation costs," should we expect the flotation costs for debt to be significantly lower than those for equity? Why or why not? how can the answer be supported.State the disadvantages of long-term debt financing.
