What Becomes a More Attractive Financing Technique When Cost of Capital

question 53

Multiple Choice

What becomes a more attractive financing technique when cost of capital is high?

• A)Cost cutting
• B)Borrowing
• C)Stock issuance
• D)Debt
• E)Staying privately owned

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Definitions:

Capital Contributions

The money, property, or other assets that an owner or shareholder provides to a business either initially or to support ongoing operations.

Total Share

Refers to the total number of shares of stock that are owned by shareholders, including both public investors and private insiders or executives.

Net Income

The net income of a business following the subtraction of all costs and taxes from its gross earnings.

Income Distribution

The allocation of a company's net income among shareholders in the form of dividends and retained earnings within the company.