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Ownership of Stock

The two broad types of financing available to a corporation include equity financing and debt financing. Equity financing involves the issuance of stock, which investors purchase and which represent a share in the ownership of the corporation. The two basic types of stock are common stock and preferred stock. Debt financing involves a loan of money from an investor to the corporation in exchange for debt securities, such as a bond. Holders of debt securities generally do not enjoy the same rights as shareholders in terms of voting rights, participating rights, or other rights related to the ownership of stock.

Inside Ownership of Stock