Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 6GI
Related questions
Question
For a corporation, equity capital comes in two forms. What are they?
Expert Solution
Step 1
Every company has two major types of financing one is through raising equity shares and the other is through debentures. Here, debentures are said to bear the fixed income securities when compared to equity holders, as the latter receives the dividend after paying all the external debts. And the equity holders are only the owners of the company as they bear the risk of losing interest and money invested, unlike debentures.
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