Equity vs. Debt

Examine the two ways a company can raise capital: equity and debt. Sal breaks down the differences between these and the pros and cons of the investors. He explains the implications of having a publically traded company and draws a stock chart to show the market value based on an exchange. Based on this chart, Sal assigns market capitalization for the company he charted. Scholars see ways companies raise money through a follow-on offering as well as through borrowing from a bank. They are introduced to the formula for assets and the difference between market capitalization and enterprise value.