Difference between Debtcapital and Equity capital
Debtcapital comprises:
- Long-term loans (debentures, loan stock etc.)
- Preference share capital
- May also include bank overdrafts, but not necessarily
All the above are termed as interest bearingcapital.
Equity capital comprises:
- Ordinary share capital
- Share premium
- Retained profits or losses
- Any reserves
All the above are termed as shareholder funds