Its abt Business St: If market supply decreases, but market demand does not, competition will increase. I dont get how competition increases ?
Loan capital is an important source of finace for many businesses. However unlike share capital, taking on an additional loan capital does not compromise ownership. Highly geared firms, whose share capital is made up mostly of loan capital, can be highly vulnerable to interest rate changes, particularly if they have not borrowed at a fixed rate. A sudden increase in the interest rate will increase their fixed costs, leading to lower profits.
Can anyone explain the exact meaning of share and loan capital? i dont get the sent in bold.