Cambridge O Level Business Studies · Syllabus 7115 · Financial Information and Decisions
Equity Finance
What is Equity Finance?
Finance raised by selling a share in the ownership of a business, most commonly by issuing share capital in a limited company. Equity carries no obligation to repay and no compulsory interest, so it does not add to the fixed cash burden of the business, but it dilutes the existing owners' share of both control and future profits, and shareholders expect dividends in return.
This definition is part of the Financial Information and Decisions chapter in Cambridge O Level Business Studies.
Last reviewed Syllabus 2026