Answer:
If the investment is financed 100% with debt, the company's cost of equity is the cost of debt. This financing scheme in commercial businesses is unlikely, it could occur in situations of selective promotion, social support for example, or temporarily, as is the case of a bridge loan, to be replaced by another type of loan. financing; where the first is short term and the second medium and long term. In this sense, the need to finance investments with medium and long-term resources stands out, that is, with a payment schedule that implies future commitments according to the nature of the financed asset. The investment, due to its amount, generates periodic returns or returns that its maturation process has, according to the competitive capacity of the production technology used, market acceptance and the application of management in accordance with the demands of the environment.
Explanation:
