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The two main factors in deterring companies from seeking external finance are favouring one investor group at the expense of another and the agency effect of providing additional information to the market.
sir i am not able to understand the 1st factor “favouring one inverstor group….at expense… pls explain?
For example, depending on the terms of the issue, raising debt finance might be attractive to new investors but might not be attractive to shareholders or to existing debt lenders.
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