Asked by Donna Mowell on Jul 05, 2024
Verified
Walter sold a piece of land he inherited from his grandparents and started a business with the proceeds.Which of the following sources has Walter used to raise funds for his business?
A) Equity financing
B) Debt financing
C) Venture capital
D) Initial public offering
E) Angel investment
Equity Financing
The process of raising capital through the sale of shares in a company, providing investors ownership interests.
Debt Financing
The raising of capital through borrowing money that must be repaid over time, usually with interest.
- Fathom the differential aspects of equity versus debt financing and their repercussions for small business owners.
- Know the role of personal assets and savings as a source of funds for starting a business.
Verified Answer
ZK
Zybrea KnightJul 05, 2024
Final Answer :
A
Explanation :
Walter used equity financing by selling a personal asset (the land) and using the proceeds to fund his business. This is a form of self-funding or bootstrapping, where the owner uses their own resources rather than borrowing or seeking external investors.
Learning Objectives
- Fathom the differential aspects of equity versus debt financing and their repercussions for small business owners.
- Know the role of personal assets and savings as a source of funds for starting a business.
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