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Questions and Answers
Raising equity capital is a way for companies to finance growth by obtaining ______
Raising equity capital is a way for companies to finance growth by obtaining ______
external sources of capital
The two main sources of capital are equity and ______
The two main sources of capital are equity and ______
debt capital
Many small- or medium-sized companies have found that growth must be financed by ______
Many small- or medium-sized companies have found that growth must be financed by ______
external sources of capital
Going public marks an important watershed in the life of a young company when a private company grows to a certain ______
Going public marks an important watershed in the life of a young company when a private company grows to a certain ______
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Private firms often need to seek external sources of capital in pursuit of ______
Private firms often need to seek external sources of capital in pursuit of ______
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Study Notes
Raising Equity Capital: Introduction
- Two main sources of capital: equity and debt capital
- Equity capital: part of ownership given in return for dividends and voting rights
- Debt capital: liabilities for the firm that must be repaid
Private Firms and Growth
- Small- and medium-sized companies often require external capital to finance growth
- Internally generated capital may be insufficient to support growth
- External sources of capital can be accessed through the market
Going Public: A Watershed Moment
- Going public marks an important milestone in a company's life
- Private companies typically go public when they reach a certain size, characterized by:
- Increase in productive capacities
- Increase in total assets and revenues
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