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Equity Financing refers to the process of raising capital through the sale of shares in a business. It involves issuing ownership stakes, often in the form of common or preferred stock, to investors in exchange for funding. This method allows businesses to access significant amounts of capital without taking on debt, thereby avoiding interest payments and maintaining financial flexibility. Equity financing is subject to various regulatory requirements, including securities laws and disclosure obligations, aimed at protecting investors and ensuring transparency in the marketplace. Effective financial management of equity financing requires a deep understanding of these regulations, as well as the ability to strategically balance the interests of shareholders, management, and other stakeholders.