Capitalizing a corporation by making capital contributions

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Capitalizing a corporation by making capital contributions to the corporation-in other words, shareholders contributing money or other property to the corporation in exchange for stock in the corporation. However, that's not the only way to capitalize a corporation. Another way is to capitalize it with debt by borrowing money from banks or other lenders (where the banks or other lenders are not necessarily direct owners of the corporation). What are the costs and benefits of pursuing this approach compared to the traditional method of capitalizing a corporation? Which do you think is better? Why?

Reference no: EM13595345

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