(solved) Equity Funding Essay

Added on - 21 Jul 2020

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Equity Funding: For the development ofcapital projects company can raise funds byoffering and issuing equity capital in themarket. The public investing in this equitywill be the shareholder of that company.Debt funding: funds for capital projectscan be raised through debt that isdebentures for any company. Companyrequiring fund can issue debentures in theopen market. Debenture holders are theexternal investors of the company havingpriority interest in the company.Private funding: Private funding includesraising fund from relatively small numberof organizations and individuals. Thisincludes fund raising from:BanksCredit unionsInsurance CompaniesGovernment Funding: Depending upon thenature of the projects, government has awide range of government grants at differentlevel that are required to fund capitalprojects. This is also known as publicfunding. A fixed percentage is set on thelimit of public funding.Regional development fund: It is a programof European government which focuses itsinvestments on priority areas known as'thematic concentration'. The priority areascovered are:Innovation and researchLow- carbon economyDevelopment of capital projectsrequires lot of funds. Theserequirements of funds need to beraised from various sources. Thefund-raising sources include:Equity FundingDebt fundingGovernment fundingRegional developmentfundP4.1 Sources and distribution of funding of capital projects
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