Answer to Question #257764 in Management for Andrew-John Bock

Question

Question 3        15 marks

What are the factors that distinguish debt from equity? Provide a brief explanation.

Answer 1

Debt is the borrowed fund while Equity is owned fund. Debt reflects money owed by the company towards another person or entity. Conversely, Equity reflects the capital owned by the company. Debt can be kept for a limited period and should be repaid back after the expiry of that term