The difference between debt and equity
Debt means borrowing money that must be repaid, usually with interest. Equity means selling a share of ownership in a company to raise funds instead.
Real World
In 2021 Deliveroo raised £1.5 billion through an IPO (equity) on the London Stock Exchange, giving up part ownership rather than taking on bank loans — avoiding fixed interest repayments during uncertain early growth.
Exam Focus
Distinguish debt from equity by linking risk: debt has fixed obligations regardless of profit; equity shifts risk to shareholders.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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