An aspect that people seem to forget is that debts are risky. Debts tend very easily in causing trouble and difficulties. Things that are bought with somebodys own money that was saved belong to the owner. Somebody who buys stuff with borrowed money has an obligation to pay back the money. This obligation can easily turn into a problem. For a long time it seemed to be considered to be internationally business to buy companies with borrowed money. The debts that were created by this way of being in business create big problems when business doesn't go on the way the managers expected. The banks and morgage providers were in a deep crisis because of all the debts that were made.
Option 7. Debt is the crack cocaine of international business.
(And most big businesses are very, very addicted.)
Infact debt is the best way to grow in international business as long as you are not overvalued. Infact increasing leverage increases the value of the firm.
One effect is that debt is perhaps cheapest source of fund. Secondly, on interest paid on debt you can claim tax benefit. Thirdly, you need not wait to accumlate money when opportunity is present just now and will be gone forever if you dont act now. Fourthly, if you are sort of unethical person, you would like to do more and more with othes money in form of debt instead of your own money in form of equity. As then if you go bankcrupt debtors bear the brunt and if you succeed all the additional profit is yours!
did somebody say "crack cocaine?"
Thanks for the laugh! Everybody likes to 'buy now, pay never'!
hahhaha!!! you've got it!!!