equity financing

equity financing definition - business

equity financing

The acquisition of funds by issuing shares of common or preferred stock. Firms usually use equity financing when they are unable to raise sufficient funds through retained earnings, or when they have to raise additional equity capital to offset debt. Compare debt financing.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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