{"version":"1.0","type":"rich","provider_name":"Acast","provider_url":"https://acast.com","height":250,"width":700,"html":"<iframe src=\"https://embed.acast.com/$/75c15221-6dfa-48f8-b412-16144efb8038/9a9f07d8-afb1-4f2d-b790-3ea00b8924e4?\" frameBorder=\"0\" width=\"700\" height=\"250\"></iframe>","title":"Equity and Debt: Can you share your bonds?","thumbnail_width":200,"thumbnail_height":200,"thumbnail_url":"https://open-images.acast.com/shows/60ed7797f1734ba0e93d0e58/60ed77b60284ab00139059ec.jpg?height=200","description":"<p>Allar and Matt&nbsp;examine the two main ways companies raise money: equity and debt.&nbsp;You'll hear an awful lot about a fictional hairdresser and discover that Allar is really keen on free stuff. But, look, don't worry, the main thing is to learn about equity and debt. So here you go:</p><p>Equity is often described as “shares,” because you own a share of a company. Potentially you risk all you paid for it, but you also have “unlimited upside”—the better the company performs, the more you can get in return.</p><p>Debt is a fixed obligation—often it’s called a “bond”—that pays a set interest rate and returns your initial investment at the end of a specific period of time. No matter how well the company performs, you won’t get more money back. Unless the company goes bankrupt, you also won’t get less money back.</p><p>The episode includes:</p><p><br></p><ul><li>How to figure out the value of a share based on the value of the company.</li><li>Shares don’t exist anymore as pieces of paper. They are dematerialized.</li><li>Companies sell shares to get money to invest in making the company bigger or more profitable.</li><li>All sorts of institutions and people invest in shares. Banks, pension funds—and individuals.</li><li>If a company has a “credible cash flow,”&nbsp;a bank may be willing to take the risk of loaning money. Then the company takes on debt.</li><li>How start-up companies can use equity and debt, and we learn how credit ratings work. ...Then there's the bit where we learn that Allar is a cheap date.</li></ul>","author_name":"European Investment Bank"}