Answer to Question #241060 in Economics for irish

Question

what equity do you own? What debt do you owe? In each case what do your equity and debt finance? what do they cost you? How do they benefit you?

Answer 1

Debt financing means you're borrowing money from an outside source and promising to pay it back with interest by a set date in the future. Equity financing means someone is putting money or assets into the business in exchange for some percentage of ownership. Each has its pros and cons depending on your needs.