Fundamentals Of Corporate Finance, 9th Edition
9th Edition
ISBN: 9781260052220
Author: Richard Brealey; Stewart Myers; Alan Marcus
Publisher: McGraw-Hill Education
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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
Fundamentals Of Corporate Finance, 9th Edition
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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