
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Question
Chapter 23, Problem 1P
Summary Introduction
To determine: The alternative sources from which private companies can raise equity capital.
Introduction:
Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.
Expert Solution & Answer

Explanation of Solution
The alternative sources from which private companies can raise equity capital are as follows:
- Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
- Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
- Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
- Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.
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Chapter 23 Solutions
Corporate Finance
Ch. 23.1 - Prob. 1CCCh. 23.1 - Prob. 2CCCh. 23.2 - Prob. 1CCCh. 23.2 - Prob. 2CCCh. 23.3 - List and discuss four characteristics about IPOs...Ch. 23.3 - Prob. 2CCCh. 23.4 - Prob. 1CCCh. 23.4 - What is the average stock price reaction to an...Ch. 23 - Prob. 1PCh. 23 - What are the advantages and the disadvantages to a...
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