MANAGEMENT

Detailed explanation-1: -Debt financing involves borrowing money. Equity financing involves selling a portion of equity in the company. While there are distinct advantages to both types of financing, most companies use a combination of equity and debt financing. The most common form of debt financing is a loan.

Detailed explanation-2: -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-3: -Definition: When a company borrows money to be paid back at a future date with interest it is known as debt financing. It could be in the form of a secured as well as an unsecured loan. A firm takes up a loan to either finance a working capital or an acquisition.

Detailed explanation-4: -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.

Detailed explanation-5: -Debt financing involves the borrowing of money whereas equity financing involves selling a portion of equity in the company. The main advantage of equity financing is that there is no obligation to repay the money acquired through it.