Question: Kern's Kernel Corporation needs to raise $ 3 0 0 , 0 0 0 of additional capital to purchase a grain silo. The corporation could

Kern's Kernel Corporation needs to raise $

300, 000

of additional capital to purchase a grain silo. The corporation could borrow $

300, 000

from a local bank or it could issue additional shares of common stock to a handful of additional investors in exchange for $

300, 000 .

Jen, the company's CFO, is considering relative advantages and disadvantages of both options. The corporation wants to minimize its federal income tax. Therefore, Jen is strongly considering debt financing because

_________________

payments will be

________________

on the company's federal income tax return whereas

__________________

payments are

______________________.

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