Elucidate what do you mean by Corporate Financing

Question

Elucidate what do you mean by Corporate Financing?

Answer 1

Corporations are financed in one of two ways: equity or debt. Equity financing refers to “what shareholders have invested in the corporation in return for shares,” while debt financing “consists of loans that have been made to the corporation.” The distinction between a share and a bond (or debenture) can become blurred as more features are attached to corporate securities. However, determining the ideal proportion of debt-to-equity financing is a complex decision that is beyond the scope of this document.