EBK FUNDAMENTALS OF CORPORATE FINANCE
9th Edition
ISBN: 8220103675925
Author: BREALEY
Publisher: YUZU
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Question
Chapter 2, Problem 1QP
Summary Introduction
To discuss: About the financing sources of small private firms and give three examples also.
Expert Solution & Answer
Explanation of Solution
The small private firms can raise funds through only financial markets for their capital investment. The different sources of finance for a small private firm can be classified in to equity or debt financing.
Equity financing is a process of selling company stock to investors for raising capital. In which a part of ownership is vested in the hands of shareholders. Debt financing means selling debt instrument to individuals or institutions for working capital or capital expenditure requirements.
Sources of finance for the small business are the following:
- Own capital
- Small business loans
- Trade credit
- Banks
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Chapter 2 Solutions
EBK FUNDAMENTALS OF CORPORATE FINANCE
Ch. 2 - Prob. 1QPCh. 2 - Financial Markets. The stock and bond markets are...Ch. 2 - Financial Markets and Institutions. True or false?...Ch. 2 - Prob. 4QPCh. 2 - Prob. 5QPCh. 2 - Financial Intermediaries. Is an insurance company...Ch. 2 - Prob. 7QPCh. 2 - Prob. 8QPCh. 2 - Prob. 9QPCh. 2 - Liquidity. Securities traded in active financial...
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