What causes debt issuance to be more lucrative to the owner than issuing new equity?

Question

what causes debt issuance to be more lucrative to the owner than issuing new equity?

Answer 1

jeff is correct but he did not give much of an explanation.  The interest on debt is tax deductable.  There does however come a point where if the interest rate is too high,  equity becomes a better option.  After all, the company has to have sufficient cash flow to cover the interest payment, where as issuing equity has not impact at all on cash flow, only eps.

Answer 2

A high tax rate.