Ξένη Ορολογία Ενότητα 8: Sources of Capital Ευαγγελία Κουτσογιάννη Τμήμα Λογιστικής και Χρηματοοικονομικής ΕΛΛΗΝΙΚΗ ΔΗΜΟΚΡΑΤΙΑ Ανώτατο Εκπαιδευτικό Ίδρυμα Πειραιά Τεχνολογικού Τομέα

Άδειες Χρήσης Το παρόν εκπαιδευτικό υλικό υπόκειται σε άδειες χρήσης Creative Commons. Για εκπαιδευτικό υλικό, όπως εικόνες, που υπόκειται σε άλλου τύπου άδειας χρήσης, η άδεια χρήσης αναφέρεται ρητώς. 2

Χρηματοδότηση Το παρόν εκπαιδευτικό υλικό έχει αναπτυχθεί στα πλαίσια του εκπαιδευτικού έργου του διδάσκοντα. Το έργο «Ανοικτά Ακαδημαϊκά Μαθήματα στο Ανώτατο Εκπαιδευτικό Ίδρυμα Πειραιά Τεχνολογικού Τομέα» έχει χρηματοδοτήσει μόνο την αναδιαμόρφωση του εκπαιδευτικού υλικού. Το έργο υλοποιείται στο πλαίσιο του Επιχειρησιακού Προγράμματος «Εκπαίδευση και Δια Βίου Μάθηση» και συγχρηματοδοτείται από την Ευρωπαϊκή Ένωση (Ευρωπαϊκό Κοινωνικό Ταμείο) και από εθνικούς πόρους. 3

Σκοποί ενότητας In this section you will understand specific aspects of the world of finance in English practise vocabulary associated with bonds, loans, and shares learn how to use the confusing verbs rise, arise, raise learn the uses of modal auxiliaries and their most commonly used functions 4

Sources of Capital 5

Money is needed both to start a business and to keep it going. The original investment of the owners along with money they may have borrowed should be enough to open the doors. Then, it would seem that income from sales could be used to finance the firm’s continuing operations and to provide a profit as well. However, temporary financing may be needed when expenses are high or income is low. Also, situations such as the opportunity to purchase or expand a facility, may require more money than it is available within a firm. In either case, the firm must look for outside sources of financing. Long-term financing can be obtained as equity or debt capital. 6

Equity financing For a corporation, equity capital is obtained by selling either common or preferred stock. Holders of common stock elect the corporation’s directors and must approve equity funding plans. Holders of preferred stock usually do not vote on corporate matters, but they must be paid a specified dividend before holders of common stock are paid any dividends. Another source of equity financing is retained earnings, which is a portion of a business’s profits that is reinvested in the corporation. 7

Equity financing Glossary financing: the provision of funds/χρηματοδότηση equity capital: funds received for an interest in the ownership of a business/ μετοχικό κεφάλαιο, τα ίδια κεφάλαια common stock: ordinary shares/ κοινές μετοχές preferred stock: (also preference shares): stock guaranteed priority in the distribution of assets/ προνομιούχες μετοχές dividend: an amount of a company's profits that the company pays to people who own stock in the company/ μέρισμα retained earnings: the portion of net income that is not paid out as dividends but used for some purpose by the company/ αδιανέμητα κέρδη 8

Debt financing 9 For a small business, long –term debt financing is generally limited to loans. Large corporations have the additional option of issuing corporate bonds. A corporate bond is a corporation’s written pledge that it will repay a specified amount of money, with interest, on the maturity date. All the conditions relating to bond issues are specified in the bond indenture. From the corporation’s standpoint, financing through a bond issue differs considerably from equity financing. Interest must be paid periodically, but it is a tax- deductible business expense. Furthermore, corporation bonds must be redeemed for their face value at maturity. If a corporation defaults on these payments, owners of bonds could force the firm into bankruptcy.

Debt Financing Glossary debt financing: when a business chooses to go into debt to get the money needed to continue its business operations/ χρηματοδότηση με δανεικά κεφάλαια loan: money lent at interest for a period of time/ δάνειο bond: a certificate of debt issued in order to raise funds; it carries a fixed rate of interest and is repayable with or without security at a specified future date/ ομόλογο pledge: collateral for the payment of a debt or the performance of an obligation /υπόσχεση, ενέχυρο, εχέγγυο maturity date: the date on which an obligation must be repaid ημερομηνία λήξης Indenture: the formal agreement between a group of bondholders and the debtor as to the terms of the debt/ σύμβαση ομολογιακού δανείου face value: nominal value /ονομαστική αξία default: failure to meet financial obligations/ αθέτηση, αφερεγγυότητα bankruptcy: legally declared insolvency, or inability to pay creditors/ πτώχευση 10

Τέλος Ενότητας