When a Firm Wants to Borrow Directly from the Public

question 156

True/False

When a firm wants to borrow directly from the public to finance the purchase of new equipment, it does so by selling shares of stock.

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Definitions:

Consideration

Consideration in contract law refers to something of value promised to another when making a contract, which can be a service, money, or an object.

Bilateral Contract

A type of contract involving two parties where each party makes a promise or set of promises to the other.

Consideration

Something of value exchanged between parties in a contract, making the agreement legally binding.

Inadequate Consideration

A situation in a contractual agreement where the value exchanged between parties is significantly disproportionate or deemed insufficient.