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What is Capital Sources: Internal vs. External about?

External sources of capital such as debt and equity are used more than internal sources because companies can leverage external funds if the interest rates on debt are lower than dividend payout percentages. Among external sources, both debt and equity are commonly used, with debt providing lower cost capital as long as companies can earn returns higher than interest rates. There are also trends in corporate financing structures over time as successful companies rely on either retained earnings or different

Author

dskrishna

Language

EN