Distinguish between equity and debt securities.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Distinguish between equity and debt securities.
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Step 1
Equity and debts are the most important forms for fund raising.
Equity refers to the investment done by the owner in the business, the most common of this is Common stock and many companies may issue preferred stock as well.
Debts are the borrowing. When company raise the money from the creditors it refers to the debt security. The most basic debt securities are bonds payable and notes payable.
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