2007-08-21 04:12:07 · 4 answers · asked by totallylegal 1 in Business & Finance ➔ Other - Business & Finance
I would put the question more like: what is the risk level of equity finance ?
Depending on the company used, the risk varies.
Equity Finance allows you to borrow money from the current value of your home or car, or any valuable properties.
So, basically, you could release equity from your home to buy a property in spain... and then release again equity from your property in spain and so on...or buy to let property...
the risk is...interest rate rising,...and losing your home...to do short.
Seeing the house prices rising again and again...the risk seems very low if you don t borrow 100% of your property value.
I would suggest to limit yourselft to 30% of you home value.
All the best
J
2007-08-21 04:29:29 · answer #1 · answered by John S 4 · 0⤊ 0⤋
Equity usually relates to ordinary shares.The advantages of equity finance from the view point of company are:
1 Dividends(return of investor) are only payable in the year of profit means the investor cannot force the company to pay their dividends in year of loss.
2 Can bring expertise,contacts and skills in the company .
Disadvantages are
1 The involvement of shareholders in the company decisions.
2 Raising equity finance is costly and time consuming and there are legal issues to comply with.
FOR MORE INFORMATION http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1073789573
2007-08-21 13:34:09 · answer #2 · answered by M.A.W. 3 · 0⤊ 0⤋
Advantages = more capital
Disadvantage = Expensive type of financing. Higher potential for blowing leverage covenants with your banker down the road.
2007-08-21 11:30:03 · answer #3 · answered by fatcomo 2 · 0⤊ 0⤋
Either pay more attention in class, read the set book or ask your Tutor ...
2007-08-21 12:11:09 · answer #4 · answered by Steve B 7 · 0⤊ 0⤋