Fiedler FFHJ
Publicly traded companies finance their business activities through a combination of debt and equity with each requiring a different rate of return. While the providers of debt receive their return in form of interest payments, providers of equity capital receive a return based on the company’s risk in excess of the market rate of return in form of dividend payments or increases in stock price. No matter the source of the company’s capital, whether stemming from leverage, equity or retained earnings from operations, it is commonly used for funding current operations or growth opportunities to expand existing business or tap into new markets.
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