BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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By the owner’s funds or funds from relatives
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By government grants or tax subsidies
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By selling assets or taking on a bank loan
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By raising equity or taking on debt
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Detailed explanation-1: -There are two methods of equity financing: the private placement of stock with investors and public stock offerings. Equity financing differs from debt financing: the first involves selling a portion of equity in a company while the latter involves borrowing money.
Detailed explanation-2: -Firms can raise the financial capital they need to pay for such projects in four main ways: (1) from early-stage investors; (2) by reinvesting profits; (3) by borrowing through banks or bonds; and (4) by selling stock.
Detailed explanation-3: -External sources of financing fall into two main categories: equity financing, which is funding given in exchange for partial ownership and future profits; and debt financing, which is money that must be repaid, usually with interest.
Detailed explanation-4: -Debt and equity are the two main types of finance available to businesses. Debt finance is money provided by an external lender, such as a bank. Equity finance provides funding in exchange for part ownership of your business, such as selling shares to investors.