Financing through debt and equity

squidge | 12:02 Fri 23rd Jun 2006 | Business & Finance

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I'm getting myself confused! A company can finance itself through either or debt or equity, but I'm confused, debt is loans and equity is shares, right? Where do bonds fit in? I thought a bond was a debt because of the coupon payment, but then shares have dividends - so is the release of bonds a method of financing through debt or equity?

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janeo

Try asking your bank.

Bonds are debt. They would sit on the balance sheet as a creditor as you effectively owe the money to whoever issued the bond.

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