When raising capital for a business venture, a company can either
raise debt capital, equity capital or a combination of the two. Debt
capital is money loaned to the company at an agreed interest rate
for a fixed time period. Conversely, equity capital is money
invested by owners (shareholders) for use in business operations
that need not be repaid. Combinations include convertible securities
which may be debt that can be converted into equity at some point in
the future.
The simplest form of equity capital is common stock. Common stock
has many distinguishing factors as follows:
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