Party A graduated from business school and has learned the details about running a successful business. He is ready to utilize his education and does not want to work for anyone. Party A had decided to sell the fifty thousand rulers that his Uncle gave him. He knows that he will have to purchase additional supplies.
You are his business advisor, and he wants to know how he can raise the money to finance his business and if he should take out a loan.
Discuss the two main ways that corporations are financed?
There are two main ways that corporations are financed: through equity financing and through debt financing. Equity financing is when the company sells shares of ownership in the company to investors in exchange for cash. This cash can then be used to finance the company’s operations. Debt financing is when the company takes out loans from lenders, which must then be repaid with interest. This cash can also be used to finance the company’s operations.
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