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Choose the necessary word and put it in the sentence
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| 1.... funding is a financing formed by borrowing. 2. They have borrowed much money and they have to pay a big.... 3. Financing by shares is called... funding. 4. That is a very profitable deal, for that purpose we need extra.... 5. You can sell your shares and.... 6. They are... 7. The current assets of a company usually include cash and 8. As a result of this deal we'll have greater... than outflow. | 1.equity 2.negotiable 3.interest 4.inventory 5.funding 6.inflow 7.bond 8.debt |
Dialogue
Mary: It' s so nice to see you, Frank. Sorry, I couldn't come to your office today. Frank: Never mind. Have a seat. Let' s start by having some coffee. Later.
Mary: So Frank. I guess it might be right time for me to invest in that computer company. As my stockbroker, what can you suggest?
Frank: I am sure they are doing extremely well and they would welcome your investment.
Mary: But why do they need my investment if they are doing so well?
Frank: O.K. I think I should explain you a little about a corporate finance.
Mary: Go ahead. If it concerns my money I am always interested.
Frank: If a corporate enterprise wants to expand it needs financing.
Mary: You are right.
Frank: So there are two basic types of financing: equity and debt.
Mary: What's the difference between them?
Frank: If the money is supplied by the owners of a business it is called equity funding. And the use of money supplied by loans is called debt funding.
Mary: So as investor, what am I?
Frank: Well, as an investor you become a partial owner of a business and receive equity. You get shares or certificates of common stock which represent your portion of ownership.
Mary: You did right buying the stock for me. By the way. are there any documents which show the financial state of the company?
Frank:: Oh yes. You've just reminded me. I've brought a copy of the company's Annual Report for you to look over. You should read it very carefully. And if you have something to ask do it, please.
Mary: Thanks a lot, Frank. I will. Does this company pay dividends on its stock?
Frank: Yes. In fact, I studied their Annual Report and I can tell that they have good management. Their business is doing very well, the value of their stock has been rising. It can be an excellent long-term investment, I am sure.
Mary: But if I want to sell my shares very soon?
Frank: No problem. Undoubtedly you can make a profit on the sale. But it seems to me you'll want to keep this company in your portfolio.
Mary: Thank you for your advice. You are wise as usual.
Frank: Well, my advice now is to study the company's Annual Report. You need several days for that. Then we'll meet and talk again.