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The difference between the suppliers of debt and equity financing.

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debt financing – borrowing money that has to be repaid at a later dante inn order to start a business. Usually entrepreneurs borrow from family, friends, and banks. Sometimes they can obtain money from a finance company, wealthy individuals, or potential customers. Debt financing means borrowing money and not giving up ownership. Debt financing often comes with strict conditions or covenants in addition to having to pay interest and principal at specified dates. Failure to meet the debt requirements will result in severe consequences.. Adding too much debt will increase the company's future cost of borrowing money and it adds risk for the company.

equity financing – any money invested by owners or by those who purchase stock in a corporation. If you are going to establish a corporation or at least partnership you can raise funds through selling your company’s stocks. Equity financing often means issuing additional shares of common stock to an investor. With more shares of common stock issued and outstanding, the previous stockholders' percentage of ownership decreases.

A corporation and briefly discuss the primary advantages and disadvantages of forming a corporation.

Corporation = artificial entity created by the state and existing apart from its owners.


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Stages of moral development.| The fundamental difference between the suppliers of debt and equity financing.
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