Principles of Microeconomics / Unit 15 MIC 1412 short lesson, about 20 seconds
Debt, Equity, and the Three Characteristics
Captions available
The idea
Debt commits the firm to fixed interest but keeps control; equity brings money with no repayment but sells ownership. Every investment has expected return, risk and liquidity; an interest rate pays for waiting, inflation and risk.
In practice
The Treasury pays the least; risky firms the most.
Where people slip
Founders' own money invested is a signal; higher return is the compensation for higher risk.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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