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Tag - Warrants and Convertibles

Understanding Cost of Capital – Finance

Equity Capital         When a company raises capital through the issue of ordinary shares it is effectively borrowing from the capital markets on a permanent basis. There is no maturity date associated with the shares and hence the loan is never repaid. Since the company is permanently in debt to the ordinary shareholders, the latter are the ultimate owners of the enterprise - a relationship recognized in law. The implication is that the enterprise’s business activities ought to be guided [...]