Equity Financing vs Debt Financing
View the two videos below. The first speaks favorably towards equity financing, while the second gives a more balanced review.
- Council for Economic Education. (2012, July 13). Entrepreneurship – Debt and Equity Financing. (Links to an external site.) [Video File 2:20 min] Retrieved from
- Accion in the U.S. (2015, August 11). Debt vs. Equity Financing. (Links to an external site.) [Video File 3:23 min] Retrieved from
After viewing these two videos, please apply what you have learned from the videos and from your textbook to respond following:
- Explain why the two videos seem to have different conclusions.
- Overall, debt financing is far more common and larger than equity financing for specific projects and assets. Why do you think that is?
- What is an appropriate rate of equity financing vs. debt financing for an individual’s new home or new car? Why?
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