easy · Private Credit fund-structures-returns-economics
A BDC (Business Development Company) is required to distribute at least 90% of its taxable income to shareholders.
What is the primary benefit of this structure for the BDC?
- It allows the BDC to use 10 × leverage
- It allows the BDC to invest in publicly traded large-cap stocks
- It avoids corporate-level income tax
- It guarantees that shareholders will never face a loss of principal
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