Equity finance

Equity finance is a way for companies to raise funds by selling shares. Shares can then change hands in three different ways.

Allotment is the process of the company creating shares in the first place and giving them to shareholders in return for payment.

Transfers occur when a shareholder gives their existing shares to another shareholder.

Buyback is when the company buys shares back from its shareholders.

Any of these can affect other shareholders’ holdings, as we will see below.