MyLab Finance with Pearson eText -- Access Card -- for Corporate Finance (Myfinancelab)
MyLab Finance with Pearson eText -- Access Card -- for Corporate Finance (Myfinancelab)
4th Edition
ISBN: 9780134099170
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
Question
Book Icon
Chapter 23, Problem 1P
Summary Introduction

To determine: The alternative sources from which private companies can raise equity capital.

Introduction:

Equity capital is the portion of the firm capital; these capital funds are paid into a business firm by an investor in exchange for shares of ownership in the company.

Expert Solution & Answer
Check Mark

Explanation of Solution

The alternative sources from which private companies can raise equity capital are as follows:

  • Venture capitalist: An investor who provides capital to a start-up business firm or gives their support to small companies to expand their business is a venture capitalist.
  • Institutional investor: Institution investors are those organizations which invest on the behalf of the investor. These institutions are investment banks, money managers, hedge-fund investors, commercial trusts, and various others.
  • Angel investor: An investor who provides the capital for a start-up business firm, usually in exchange for convertible debt or ownership equity is an angel investor.
  • Corporate investors: A company that invests in other companies to control the business and increase their profit is a corporate investor.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
What are the pros and cons of a private equity recapitalization?
What information do investors and creditors need when determining which companies will receive capital?
How does attracting equity capital easier for a corporation?
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Text book image
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Text book image
SWFT Comprehensive Volume 2019
Accounting
ISBN:9780357233306
Author:Maloney
Publisher:Cengage
Text book image
SWFT Comprehensive Vol 2020
Accounting
ISBN:9780357391723
Author:Maloney
Publisher:Cengage
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Text book image
Entrepreneurial Finance
Finance
ISBN:9781337635653
Author:Leach
Publisher:Cengage