Question: Given the same firm, its debt financing cost is normally relatively lower than its equity financing cost mainly BECAUSE __________________. Debt is more risky than

Given the same firm, its debt financing cost is normally relatively lower than its equity financing cost mainly BECAUSE __________________.

Debt is more risky than equity.

Debt financing is risk free.

Firms issue less debt than equity.

Firms issue more debt than equity.

Debt holders have superior claim rights to a firm's cash flow over equity holders in general.

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