What is the difference between a financial equity and a financial debt?

What is the difference between a financial equity and a financial debt Introduction: The Foundation of Finance Hello everyone! Welcome to this insightful video on the contrasting aspects of financial equity and financial debt. In the world of finance, these two terms hold immense significance. Whether you're an aspiring investor or simply curious about the intricacies of finance, this video will serve as an excellent guide. Defining Financial Equity Let's begin by defining financial equity. In essence, equity represents ownership. When you hold equity in a company, you are a shareholder, which means you have a stake in the company's assets and profits. Equity can be acquired through various means, such as purchasing shares in the stock market or being granted stock options by your employer. Exploring Financial Debt On the other hand, financial debt refers to borrowed funds. When an individual or a company takes on debt, they are essentially borrowing money with the understanding that it will be repaid, often with interest. Debt can take various forms, including bank loans, bonds, or even credit card debt. Risk and Return: A Crucial Distinction