3e) Sources of finance

Question 1

What is Equity capital?

Answer 1

Equity capital is money
contributed to a business by
an investor in exchange for
partial ownership.

Question 2

What is a share?

Answer 2

A share is a part of a company’s

capital divided to the owners.

Question 3

What is initial public offering?

Answer 3

Initial Public Offering is where
the stock of a company is offered
on the stock market for the
first time

Question 4

What is debt capital?

Answer 4

Debt capital is money that has
been lent to a business by an
external source.

Question 5

What is a grant?

Answer 5

A grant is money given by
a government or another
organisation for a
particular reason

Question 6

What are overdraft facilities?

Answer 6

Overdraft facilities are 
agreements between banks 
and businesses or individuals, 
that allow a bank account to be 
withdrawn below zero