Paper Critique



Paper Critique

Elaborate How the Paper Advanced Understanding of the Particular Issues.

The literature covers various aspects of securities and financing resources that are used for the purpose of real investments by different corporations. It precisely studies about the capital structure and corporate financing. There can be two major ways through that are described in the literature review, which include equity financing and debt financing. Both of these major financial resources have different implications with them and the decision to finance the corporation depends on the situation and different scenarios that a corporation is facing. There are various aspects that need to be considered while opting for financing resources including the balance sheet, investors and firm's entrepreneurs and managers. Apart from that, the literature review also mentions the importance of capital markets, efficiency of public markets for shares as well as theories of corporate capital structures.

There are two fundamental ways of raising equity finance; the issuance of the company stocks to the venture capitalists or investors, and by publically offering company stocks to the investors. The literature explains that when capital is raised through equity financing it involves the selling of partial interest in the firm to the shareholders. In return of the investment that the shareholders made they receive the equivalent number of shares and ownership in the company. Apart from that, it is mentioned that the equity financing is done when company is seeking to raise more cash; the company desires to float more shares in the market, and the company desires to increase the market share by issuing and floating shares to the shareholders of other companies. Similarly, the literature review also discusses about the strategy of the debt financing, which involves the acquisition of funds from the investor or lender with the agreement and understanding that the ...