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the differences between share capital and loan capital.
And the similarities.
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Answer Posted / tulja
loan capital
Part of a firm's capital employed that is
(1) raised from bank or finance company as long-term loans &
from debt-equity investors in the form of debentures or
preferred stock
(2) it earns a fixed rate of interest instead of dividends, and
(3) must be repaid within a specified period, irrespective
of the firm's financial position.
Also called borrowed capital.
Share Capital
Part of a firm's capital employed that is
1)raised by issuing shares in return for cash or other
considerations.
2)It earns dividends
3)It needs to be repaid only at the time of company's
dissolution.
4)Share capital can be composed of both common and preferred
shares.
Also known as "equity financing".
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