For the Typical Small Firm, the Primary Source of Equity

question 52

Multiple Choice

For the typical small firm, the primary source of equity capital for financing growth is

• A) operating profits.
• B) outside investors.
• C) spontaneous debt financing.
• D) retained earnings.

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Definitions:

Bid Price

The maximum price that a buyer is willing to pay for a security.

Ask Price

The price at which a seller is willing to sell a security or asset.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a specified time.

Specific Stock

A particular share or security representing ownership in a company.