BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -There are two types of financing available to a company when it needs to raise capital: equity financing and debt financing. Debt financing involves the borrowing of money whereas equity financing involves selling a portion of equity in the company.

Detailed explanation-2: -Equity financing is the process of raising capital through the sale of shares. Companies raise money because they might have a short-term need to pay bills or need funds for a long-term project that promotes growth. By selling shares, a business effectively sells ownership in its company in return for cash.

Detailed explanation-3: -Debt financing is the opposite of equity financing, which entails issuing stock to raise money. Debt financing occurs when a firm sells fixed income products, such as bonds, bills, or notes. Unlike equity financing where the lenders receive stock, debt financing must be paid back.

Detailed explanation-4: -Debt financing occurs when a company raises money by selling debt instruments, most commonly in the form of bank loans or bonds. Such a type of financing is often referred to as financial leverage. As a result of taking on additional debt, the company makes the promise to repay the loan and incurs the cost of interest.

Detailed explanation-5: -Debt financing is any type of loan that a company uses to fund its business as part of the capital raising process. Essentially, when a business chooses to fund their working capital with a loan, it means they get their money from an outside source. This incurs a debt to the lender of those funds.