Dividend vs interest

Funding is a core need of most businesses. Funding can primarily take two forms – equity or debt. Equity involves transferring part ownership of the company to the funder in exchange for funds. Debt involves taking of loans or accepting of deposits, without partying with any part of ownership of the entity. In either case, … Read moreDividend vs interest

Marginal cost vs average cost

Definitions and explanations: Marginal cost: Marginal cost is the cost incurred for producing one extra unit of output. In other words, it is the total change in total cost that comes from producing one extra unit of output. The overall reason behind calculation of marginal cost is determining the extent to which the company is … Read moreMarginal cost vs average cost

Difference between futures and options

A stock market has a variety of investment tools through which investors can trade. This includes derivative products which are investments which derive their value from the value of an underlying asset. These are used by investors and traders who wish to speculate on market movements and enter contracts accordingly to profit in the short … Read moreDifference between futures and options

Difference between ROI and RI

Definitions and meanings: Return on investment: Return on investment (ROI) is a measure which calculates the efficiency of an investment by calculating percentage of return earned by that investment. Residual income: Residual income (RI) is the amount of income an investment opportunity generates above the minimum level of rate of return. Formulas and example: The … Read moreDifference between ROI and RI