CHAPTER 2

How a company is funded

If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.’

John Maynard Keynes

icon Aim

The aim of this chapter is to understand the business cycle of a company, how a company is funded and the advantages and disadvantages of the two primary sources of that funding. We will also touch on the world of derivatives.

icon Outcomes

By the end of this chapter you will understand:

  • the business cycle
  • the difference between debt and equity as a means of funding the business
  • the advantages ...

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