What is Debt ?

What is Debt ?

Debt is a type of finance raised by a company from various institutions and individuals to fulfill its long-term goals and objectives. Debt can be characterized by repayment and a fixed interest rate, i.e. the amount raised is repaid to the lender within a fixed duration and fixed interest on the sum is provided to the lender. Debt is considered a liability to the company. Borrowing from banks, loans from various institutions, debentures, loans, etc., are examples of debt....

What is Equity ?

Equity is a type of finance in which a company raises finance from various institutions and individuals by offering ownership of the company to them in the form of shares. There is no such requirement of repayment and fixed interest in this type of source of finance. Equity shareholders are called owners of the company. They are entitled to get dividends from the profits earned by the company....