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how to raise capital

how to raise capital

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Answer #1

Capital can be raised through equity issue in which investors invest in the company and become partners in lie of shares. The cost of equity is high and involves high amount of flotation cost.
It can also be raised through bond issue or loans from bank. The company has to pay coupons and the interest rates are determined by the credit rating of the firm.
It can raise through preference shares in which large amount of shares are given to few investors in echnage for a predetermined price.

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