Question: Problem #3 (12 points) The following are two questions about raising long-term capital through debt or equity financing: a) (6 points) Why do firms raise

$Problem \#3 (12 points) The following are two questions about raising$

Problem \#3 (12 points) The following are two questions about raising long-term capital through debt or equity financing: a) (6 points) Why do firms raise capital by borrowing money (issuing debt) rather than selling equity? Why might is not be a good idea to issue debt? b) (6 points) Is a firm's common stock always riskier than a firm's debt? Why or why not

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