External Financing Via Equity Involves Issuing Which of the Following

question 82

Multiple Choice

External financing via equity involves issuing which of the following?

• A)shares of stock
• B)bonds
• C)derivatives
• D)junk bonds

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Definitions:

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Sell Shares

The act of offloading equity stakes in a company, usually in the form of stock, to raise capital or realize gains from investment.

Exercise Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset or security.

Black-Scholes

A mathematical model used to determine the theoretical price of European-style options, factoring in time, volatility, interest rates, and dividend payments.