Yahoo Finance

financeAn entity whose income exceeds its expenditure can lend or invest the surplus earnings to help that excess income produce more income sooner or later. Though however, an entity whose revenue is lower than its expenditure can increase capital by borrowing or promoting equity claims, lowering its bills, or increasing its earnings. The lender can find a borrower—a financial middleman corresponding to a financial institution—or buy notes or bonds (corporate bonds, government bonds, or mutual bonds) in the bond market. The lender receives curiosity, the borrower pays the next interest than the lender receives, and the monetary intermediary earns the distinction for arranging the loan. Although it’s in principle totally different from managerial finance which studies the monetary administration of … Read More

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