What is your perspective on having debt? Do you personally (not from the textbook) see some...

What is your perspective on having debt? Do you personally (not from the textbook) see some debt as good or bad?

Expert Solution

Debt is borrowing money for carrying out a desired activity. For example: a company may take debt when it requires financial support to expand its business. This is beneficial for the company as the company will receive tax benefits for taking debt. The aim of debt is to provide financial help as well as to make a balanced portfolio of different types of financial investments. Thus, my personal opinion is that a little bit of debt is good for the company but too much dependence on debt is bad for the company's financial health.

From a personal perspective, debt means taking loans. There can be several situations where a person may require more money and may not have sufficient funds for meeting certain needs. In such a situation, the person may opt to take loans. If the loan money is used properly and repaid back on time then it is good. There is however another point of view that since loans are available easily, people are using it frequently. It is better to have sufficient funds and own things than buy things on credit. Therefore, I would conclude that there are no good or bad debts, it is more about the way the money is used and whether it is repaid back on time or not.

jeff jeffy answered 1 year ago

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