QUESTION FOUR A

The decision by a company to obtain capital funding usually involves a choice between debt funding and equity funding.

Required:

Explain, in general terms, the distinctions between debt funding and equity funding, and briefly explain why debt funding might be more advantageous for a company than equity funding.

QUESTION FOUR B

In general terms, describe the different ways in which insolvent companies can be administered under New Zealand law (other than internally by the board of directors of the company) and under what conditions.