📝 One-liners · 65 cards
SOURCES OF FINANCE AND FINANCIAL STRATEGIES
What is the primary distinction between equity and debt as sources of finance?
Equity represents ownership capital with no fixed repayment obligation and carries residual claim on assets, while debt is borrowed capital with fixed interest obligations and priority claim over equity in liquidation.
What is an Initial Public Offering (IPO) and what does it achieve for a company?
First public sale of shares to raise equity capital
What does the concept of 'optimal capital structure' seek to achieve?
Optimal capital structure seeks to minimise the weighted average cost of capital (WACC) and maximise the firm's market value by identifying the ideal mix of debt and equity financing.
What is 'retained earnings' and why is it considered a source of finance?
Accumulated profits reinvested in the business for growth
🔒
Unlock 65 revision one-liners
Interactive flashcard deck — flip every card to drill questions and answers, mark the ones you got wrong, and revise smarter for SOURCES OF FINANCE AND FINANCIAL STRATEGIES.
🪙
Unlock cost
300 coins
30-day access · re-unlocks free for 30 days