PROJECT TOPICS ON THE CHALLENGES OF EQUITY FINANCING IN NIGERIA

THE CHALLENGES OF EQUITY FINANCING IN NIGERIA

Equity: is a money that is invested in a firm by its owner(s) or holder (s) of common stock ( ordinary shares) but which is not returned in the normal course if the business. Investors recover it only when they sell their shareholding to other investors, or when the assists of the firm are liquidated and proceeds distributed among them after satisfying the firms obligation ( business dictionary).
Equity is the money acquired from the small business owners themselves or form other investors ( susanward).
    The meaning of equity depends very much on the context. In general, one can think of equity as ownership in any asset after all the debts associates with that asset are part off. For example, a car or house with no outstanding debt is considered the owner’s equity because he or she can sell the item readily for cash. Stocks are equity because they represent ownership in a company.( investopedia)
    Equity is the first and major source of long term fund for any business (Nigeria stock exchange analysis 1983). It is also financial base of support for subsequent borrowing of existing firm. It is the financial bedrock of every business establishment and of cause of business financing.
    Equity as a source of financing has a number of advantages to both companies and individuals and to the natural economy in general.


The individual stand to enjoy the following advantage receives divided which often represent higher yards than interest on saving account or vestiges form real estate building: the value of one investment appreciate an investment in a profitable company through scripts or bone share ( right issue) buying share is a way to keeping pace with inflation. A share holder enjoys a piece of mind as he is not involve in managing the business; wealth occurring from shareholder is hardly noticeable and hence does not attract any or jealously , motoring investment is fairly easy through stock broken and newspapers publication, and bank will be ready to accept one share certificate as collateral for borrowers. Companies on the other hand, stand to enjoy the following advantages by financing.
Through equity, it does not entails obligation on the fixed maturity rate.

Act as a question against its credit worthiness to a firm safe more easily than debt, money is generally raised at a lower effective interest rate on stock market than though loan marketable securities can be used instead of such advantage as part of the consideration, share valuation market tability will allow a realistic value to total asset. It add prestige to business and will lead to increase recognition from the suppliers, creditors, press and general public, it add to personal status of the individual that involved and may help in the hiring of equity staff and the introduction of employees share scheme wider spread of ownership can assist the company in spreading. It is cooperate philosophy objectively the survival and continuity will be ensure diffusing the one man ownership that has dominate some and which affected the healthy central and development of business in the country in a much as the common stock holder (equity right) to a company are it is owners the entitle to elect board of directors who in turn select the management and management actually operation of the company.