Companies raise funds through debt capital principally, Ask an Expert

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Companies raise funds through debt capital (principally through bonds) or equity (common stock). More than 15 years ago the CFO of Home Depot spoke at Nova (I cannot remember the exact date due to my age). He was asked the following question: "Why does HD not have any long term debt or much debt at all to speak of?" His answer: "because we like to sleep at night." Comment on debt and equity and the capital structure of a company. For example, is it wise to have no debt? Would the CFO's answer be acceptable if you were a shareholder?

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