Running head: SOURCES OF DEBT AND EQUITY FUNDINGSources of Debt and Equity fundingNameCourseInstructorDate1Running head: SOURCES OF DEBT AND EQUITY FUNDING2A company can finance its operations either through debt or equity. Equity financingrefers to investment by the investors through owning shares in the company with the hope thatthe shares will appreciate and yield dividends. Equity financing requires a company to show itspotential to improve its financial performance in the future and increase the share prices. Theinvestors will require thorough financial background to the company they are financing. Debtfinancing on the other hand is cash that is borrowed from lenders such as banks with a fixedinterest rate and a predetermined maturity date. Debt financing provides opportunity for acompany to control its management decisions and also maintain ownership. Debt financing doesnot require thorough investigation into the companys finances rather it will only be required topay interest on the loan. Debt financing will require an evaluation of the financial performance.One of the roles of investment bankers is to help in funding acquisitions. An investmentbanker helps a company to raise funds in the capital market. Investment bankers go through thefinancial statements of a company and publish prospectus to attract potential investors.Investment bankers work closely with financial institutions, public and private companies andagencies. Through revie ...
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