ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the indirect transfer of funds.
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the indirect transfer using other financial intermediaries.
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the direct transfer of funds.
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the direct transfer using other financial intermediaries.
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none of the above.
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Detailed explanation-1: -Equity financing is when a business raises funds by selling company stocks. These can take the form of common shares or preferred shares. In doing so, you’re essentially selling off little pieces of your company to investors to raise capital.
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: -Corporations can sell stock to raise money for the business.
Detailed explanation-4: -Equity capital is generated through the sale of shares of company stock rather than through borrowing. If taking on more debt is not financially viable, a company can raise capital by selling additional shares. These can be either common shares or preferred shares.