Which of the following is an example of equity finance?
Equity finance is the process of raising capital through the sale of shares. The correct example given is 'c. Stock', which represents ownership in a company. Other options like bonds and bank loans represent debt finance, not equity finance.
Equity finance refers specifically to raising capital through the sale of shares in a company. This method allows corporations to invite investors to share in the ownership and profits of the company. Among the options provided, the correct example of equity finance is:
When a company issues stocks, it is essentially offering ownership in the business to investors. In contrast, other options such as corporate bonds and municipal bonds represent debt finance, where the issuer borrows funds with the promise to pay interest and return the principal. A bank loan also falls under debt financing as it involves borrowing money that must be repaid over time.
1. Stocks (Equity Finance): Shares of ownership in a company.
2. Bonds (Debt Finance): Loans made to the company or government.
3. Bank Loans (Debt Finance): Funds borrowed from a bank that must be repaid.
https://brainly.com/question/32557251