ECONOMICS

Detailed explanation-1: -Answer. Answer: The primary benefit of raising equity capital is that, unlike debt capital, the company is not required to repay shareholder investment. Instead, the cost of equity capital refers to the amount of return on investment shareholders expect based on the performance of the larger market.

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. When owners of a business choose sources of financial capital, they also choose how to pay for them.

Detailed explanation-3: -Corporation. The corporation generally is the easiest form of organization for raising capital from outside investors. Equity capital may be raised by selling stock to investors.

Detailed explanation-4: -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-5: -The three main sources of capital for a business are equity capital, debt capital, and retained earnings. Equity capital is where a company raises money by selling off a percentage of the business in the form of shares which are purchased and owned by shareholders.