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⍰ ASK How does the industry in which a company operates affect its ideal capital structure?

The kind of business a company does affects how it should get money because different industries have different needs and risks. Some businesses, like manufacturing, need a lot of money upfront for things like machines. They might like borrowing money because it helps with taxes and keeps their own money for everyday needs.

But for industries like tech or biotech that change a lot and grow fast, it's better to sell shares to get money. That way they can fund things like new ideas without owing fixed amounts from borrowing. These industries care more about being flexible and quick than getting tax benefits from borrowing.
 

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