CASE STUDY #1 Sofia Grenier's Halifax-based phone case business was growing steadily. The cases featured work from Maritime artists, making them popular with locals who were proud of their heritage, as well as with tourists visiting the region. Based on customer feedback, Grenier was considering expanding into related lines, including laptop skins and cases. To do so, she would need to secure additional capital, but she was unsure about the relative merits of debt and equity financing for her business. She had already incorporated the business, and had a small group of friends as shareholders. She knew that some would be concerned about potential dilution if she chose equity financing, while others would be concerned about debt and the pressure the associated obligations might place on the business.

YOUR TASK

1. What are one to two key characteristics of equity financing?

2. What are one to two key characteristics of debt financing?