cost of capital

Paper instructions:
Businesses need to raise money to start up, expand, and change— in short, to invest. The two most common ways to raise money are debt (bank loans, bonds, leases, etc.) and equity (shares of stock). Each of these ways to raise money has a cost, generally expressed as an annual percentage rate (such as “10% per year”). Discuss variety of ways/methods/resources to raise capital when a business is need of funds. Why is the cost of debt less than the cost of equity? Does this premise always hold true?

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