What Is Equity Financing? - Definition, Pros, Cons & Examples


Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Equity in a sole proprietorship is a combination of ___________.

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1. An advantage of common stock, from the stockholder's perspective, is ____________.

2. Which of the following questions regarding stocks and equity financing is NOT true?

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About This Quiz & Worksheet

Equity financing is important to be familiar with in business and finance. This quiz/worksheet will help you test your understanding of its implications and principles.

Quiz & Worksheet Goals

In these assessments you'll be tested on the components of:

  • Equity
  • Common stock
  • Preferred stock
  • Hybrid securities

Skills Practiced

This quiz and worksheet allow students to test the following skills:

  • Distinguishing differences - compare and contrast common stock and preferred stock
  • Information recall - access the knowledge you've gained regarding the elements of equity
  • Knowledge application - use your knowledge to answer questions about hybrid securities

Additional Learning

To learn more about equity financing, review the accompanying lesson, What is Equity Financing? - Definition, Pros, Cons & Examples. This lesson covers the following objectives:

  • Define equity
  • Know how equity is increased
  • Define dividends and retained earnings
  • Differentiate between preferred and common stock
  • Differentiate between cumulative and non-cumulative preferred stock
  • Familiarize yourself with hybrids in equity financing