How might stock issues be preferable to borrowing money for firms looking to finance operations?

The issue of shares is a process of capitalization of a company. This works by dividing the company into a certain number of shares that will be traded in the capital market. Buyers of corporate stock will then have a stake as if they owned the company in proportion to the stock they bought. This is interesting for the company to finance itself as it is its own money. If companies sought financing from banks, interest payments would be required.

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