What is the difference between debt and equity?

Questions › What is the difference between debt and equity?
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Nikhil Rawat asked 2 years ago
   
3 Answers
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Priya Vishwas answered 2 years ago
Debt is a loan that is repaid with interest. Equity is the value of ownership in an enterprise. Debt and equity are two different things. Debt refers to the money that you borrow, whereas equity refers to the value of ownership in an enterprise. In simple terms, debt means borrowing money and paying it back with interest, whereas equity means owning a share of a company and receiving dividends from it.
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Akshaj Singh answered 2 years ago
Debt is a loan that you borrow in order to purchase something. Equity is the ownership stake in a company, the right of an investor to share in the profits of the company. The difference between debt and equity is that debt has an interest rate while equity does not.
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Deepak Goyal answered 2 years ago
The following are the difference between debt and equity:
  • Debt is the borrowed fund while equity is owner's capital
  • There are fixed interest charges on debt while there is no interest paid to equity.
  • Security is required in debt while no security is required in case of equity.