Answer Posted / varun vohra
There are two ways for companies to raise money for
business investment - they can borrow it and/or they can
issue shares - otherwise known as stocks. In corporate-
finance-speak, stocks are called equity capital and
borrowed money is debt capital. Equity (stocks/shares)
differs fundamentally from debt in two ways.
It represents an ownership interest in a company - you're
buying a share of the company, not lending the company
money.
A bondholder (basically, a lender) is entitled to a regular
interest payment and can call for a winding up of the
company if interest isn't paid. An equity holder is not
entitled to any regular payment - (although most stocks
provide for the payment of a cash dividend this is at the
discretion of the company's management).
So, buy a stock and you're buying part-ownership of a
company. And as an owner, you take a share in the company's
future profits.
| Is This Answer Correct ? | 11 Yes | 0 No |
Post New Answer View All Answers
What do you know about Bio metric ATM?
What does money laundering involve?
If you get a better job in Public Sector (IAS/PCS Etc.), will you leave us?
Explain opportunity cost and differential cost.
Can I Erase My Student Loans By Filing Bankruptcy?
What are the services generally provided by a bank's branch?
What do you understand by the term Black Money?
How will you differentiate between Balance of Payment and Balance of Trade?
What is the logo of Bank of Baroda know as?
jam topic on nuclear family vs. joint family
common questions asked at the time of interviews in industry n banks
is there any benefit to do MBA in finance and Human Resource Management.please give me suggestion that if i do both the things so it would be beneficial for me in corporate sector or not? THANKS
HI ,MY QUALIFICATION B.A. + PGDCA AND TRAINED ON JAVA . NOW I WANT TO KNOW TO GET JOB SOON WHICH COURSE I HAVE TO LEARN ?
Define Preference Shares?
Why Are You Not Working Anywhere From Past 6 Months ?
