Couverture de l’UE : Huit premières fiches : une par thème et une méthode de présentation. Il reste à développer les sous-thèmes, la veille d’actualité et l’entraînement oral avec interaction.
Objectif : Comparer deux modes de financement sans les confondre.
Two sources of funding
Debt financing involves borrowing funds under agreed repayment terms. Equity financing involves providing ownership interests in exchange for funds. A loan does not usually give the lender the same ownership rights as a share.
Debt may allow existing owners to avoid dilution, but repayment and interest can place pressure on cash flow. New equity may strengthen the funding base, while reducing the percentage owned by existing shareholders if they do not participate.
Answer with criteria
The better option depends on risk, cash generation, growth plans and the owners’ objectives. Distinguish profitability from liquidity: a growing company can report profits and still face a shortage of cash.
Exercice
A founder owns 100 shares. An investor subscribes for 25 new shares. What percentage does the founder hold afterwards? Explain in English.
Afficher le corrigé expliqué
The founder holds 100 of the 125 shares, or 80%. The investor holds 20%. The founder’s number of shares is unchanged, but the ownership percentage has been diluted.
Question de validation
Issuing new shares can…
Dilute existing ownership percentages
Always eliminate business risk
Automatically create a profit
Vérifier la réponse
Réponse A : Dilute existing ownership percentages
If existing owners do not subscribe proportionally, their percentage of total shares may fall.