Equity capital represents the personal investment of the owner (or owners) in a business and is sometimes called ________ because of the potential outcome.

Question

Quizplus · Accepted Answer

Equity capital is sometimes called risk capital because the owner(s) are taking on the risk that their investment may not yield a return or may even result in a loss. This is in contrast to debt capital, where the investor (such as a bank) expects a return in the form of interest payments, but does not share in the risk of the business. Opportunity capital and layered financing are not commonly used terms in relation to equity capital.

Equity Capital Represents the Personal Investment of the Owner (Or