Increased Pressure from Shareholders Equity investors expect strong returns, which can lead to heigh
Increased Pressure from Shareholders
Equity investors expect strong returns, which can lead to heightened pressure on management to deliver high profitability and share price growth, potentially compromising long-term strategies.
3. Higher Long-Term Costs
In the long run, equity financing can be more expensive than debt financing. Shareholders demand dividends and capital appreciation, which could outweigh the fixed costs associated with loans.