Borrow

Donate
Earn
M
1
Invest
Lend O
2
Lose
Make
Obtain
N
3
E
4
Provide
Save
Spend
Transfer
Waste Y
5
Win
 What are the advantages and disadvantages for a private individual of borrowing money
from these sources?

1 a bank

2 a friend or colleague

3 a loan shark

4 a member of your family

5 a pawnbroker

6 a credit-card company
;’ Don’t put all your eggs in one basket
Listening
Ways

To

Raise

Money
 shareholder noun [ C ]
/ˈʃerˌhoʊl.dɚ/
(US also stockholder)

a person who owns shares in a company and therefore gets

part of the company's profits and the right to vote on how
the company is controlled

Ex:Shareholders will be voting on the proposed merger of

the companies next week.
 equity
noun
/ˈek.wə.t̬ i/
the value of a company, divided into many equal parts owned
by the shareholders, or one of the equal parts into which the
value of a company is divided:

Ex:He sold his equity in the company last year.

 convertible bond
noun [ C ]
UK US
FINANCE, STOCK MARKET
a bond that can be exchanged for ordinary shares:
The group may have to seek additional future funding by issuing
convertible bonds.
 radarnoun [ C ]
/ˈreɪdɑːr/
below/under the radar (also below/under the radar screen)

if something is below or under the radar, people are not aware of it:

Ex;They were operating under the radar, selling their Web wares
from some garage in Bakersfield.
Simon Davies is Managing D irector ( Restructuring) at the Blackstone Group, a leading
private e quity f irm. L isten t o the f irst part o f the i nterview and answer these qestions.

1)Which three w ays of raising finance does he mention?

equity share, borrowing, hydrid

2)What a re the a dvantages of

a) shares/equity? b) public c) borrowing
markets? money?

confidentiality More fun available More fun available

 Listen the first part of interview and complet e these extracts with
maximum of three words

-
current shareholders
---------------------- first, er, equity, either ______________________1
money by borrowing
................ business being able to raise, er, ____________________2
the public market
............... raise finance in, a private market or __________________3.
................private relationships, has the _______________________4
advantages of confidentiality
bond markets
,,,,,,,,,,,,,,,,,,you're borrowing money, um, the __________________5
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,And then finally, um, ___________________6,
hybrid finance
 C D3.2 Listen to t he second part and answer this question.
What are the disadvantages of:
a) significant capital cost; investors expect a return
a) shares/equity? that reflects the risk

b)interest burden required to be paid over time, b) debt?

reducing cash the company has available for investment

c) no private relationship with investors; dispersed

c) public markets?
(i.e. widely-spread) shareholder base

d)possible lack of capital available; investors want a

significant return and some control over the management of d) private markets?
the business
CD3.3 Listen to the final part. Simon says there are four reasonswhy finance has become
a short-term business. What are they?
New Words
 syndicate noun
/ˈsɪn.də.kət/

a group of people or companies who join together in order to

share the cost of a particular business operation for which a
large amount of money is needed:

A syndicate of banks is financing the deal.

----------------------------------------------------------------------------
 incline verb
/ɪnˈklaɪn/

to (make someone) feel something or

want to do something:
inclined to be able to buy
Lenders are more naturally _____________________________and sell the investments
_______________________________________________________________________________________________________
 static
adjective
/ˈstætɪk/

not moving or changing

The loans become a more tradable feature and ___________2

___________1 less static
short-term relationship between the lender and the
creating a ______________________3
borrower.
 churn
noun
/tʃɜːn/
The situation in which customers stop buying the products or
services of a particular company, especially to buy them from a
competitor:

The churn of shares

___________________________________________________________________
 trade sth off
to accept a disadvantage or bad feature in order to
have something good:

Ex:It may be possible to trade off manpower costs

against computer costs.
 sentiment
noun [ C or U ]
/ˈsentɪmənt/
people's opinions or feelings about a situation, especially
the likely future direction of a financial market, the
economy, etc.:

Ex: Analysts and investors said market sentiment for the

time being appears positive.
 basis
noun [ C ]
/ˈbeɪ·sɪs/
plural bases US/ˈbeɪ·siz/

the most important facts or principles or ideas

that support something:

There is no basis for their statements

Ex:___________________________________.
 CD3.3 Listen to the final part. Simon says there are four reasons why
finance has become a short-term business. What are they?
REASONS

1 Breadth of opportunity gives investors a range of investment choices.

2 The speed and quality of information makes it easier to make a decision.

Banks are less relationship-driven for financing; loans are a more

3
tradable feature.

4 Easy to buy and sell shares, so the ‘churn’ (or turnover) of shares is high