1. Costlier in the Long-run: Equity financing is relatively much costlier. Investors want a higher return on their investment since funding a company involves risk, which may generate more payouts compared to interest paid in regard to a debt.1. Costlier in the Long-run: Equity financing is relatively much costlier. Investors want a higher return on their investment since funding a company involves risk, which may generate more payouts compared to interest paid in regard to a debt.1. Costlier in the Long-run: Equity financing is relatively much costlier. Investors want a higher return on their investment since funding a company involves risk, which may generate more payouts compared to interest paid in regard to a debt.