Other Points of Note
Equity can be raised both internally (retained earnings) and externally (common and preferred stock)
An equity base is essential to allow a firm to take optimal advantage of low-cost debt and create an optimal capital structure
Firms with strong equity bases are more likely to survive economic downturns (recessions) since equity financing does not place the same constraints on cash flow use as does debt financing
- 1994, HarperCollins Publishers