A Firm Can Raise Financial Capital Without Incurring Debt by Issuing

question 63

Multiple Choice

A firm can raise financial capital without incurring debt by issuing new shares and/or

• A) issuing bonds.
• B) making extra dividend payments.
• C) increasing its bank loans.
• D) reinvesting profits.
• E) investing in new capital equipment.

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Definitions:

Surplus

The amount of an asset or resource that exceeds the portion that is utilized.

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or the community.

Compensating Differentials

The variation in wage rates paid to different workers, mainly due to the non-monetary advantages or disadvantages of specific jobs.

Talent

A natural aptitude or skill possessed by individuals.