When Given a Choice, Businesses Prefer to Obtain Long-Term Financing

question 67

True/False

When given a choice, businesses prefer to obtain long-term financing through retained earnings or by borrowing from a lending institution such as a bank instead of issuing stock.

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Definitions:

Intracompany

Pertaining to activities or transactions within the same company, involving different branches or divisions.

Industry Averages

Statistical benchmarks that measure the average performance, such as profitability or growth, of companies in a specific industry.

Unprofitable Segment

A division or part of a business that does not generate profit and may drain resources from the more profitable segments.

Discontinued Operations

Parts of a company's core business or product lines that have been discontinued or sold.