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Investments in other companies

Why do companies make investments in other companies? What are the differences between debt and equity investments? What would influence a company to choose equity or debt as an investment?

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Companies make investment in other companies in order to earn additional returns. Thus they hope for earning financial income from investing in other companies. The differences between the debt and equity investments are:

Equities: Investment in shares or ownership of companies is investing in equities. There are two ways of revenue generation from this form of ...

Solution Summary

This solution explains why firms choose to invest in others and the differences between debt and equity investments