What is equity capital?

Equity capital refers to the funds generated by a business from its owners or shareholders, rather than through debt or other financing methods. This type of capital represents an ownership stake in the company and can be raised through the sale of stock or other equity instruments. When a business utilizes equity capital, it does not have to make regular interest payments as it would with borrowed funds, making it a flexible source of financing.

The other options highlight various forms of capital or funding but do not align with the definition of equity capital. Funds borrowed from banks represent debt financing, while government grants fall under non-repayable funding. Additionally, investments in physical assets like real estate pertain to capital expenditures rather than the ownership financing aspect specified in equity capital. Thus, the option detailing money acquired by a business from its owners accurately captures the essence of equity capital.