What Are the Two Primary Sources of Equity Financing

question 42

Multiple Choice

What are the two primary sources of equity financing?

• A) direct owner contributions and retained earnings
• B) owner debt structure and factoring
• C) cash and owners' equity
• D) discounting and factoring

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Definitions:

Dividends Payable

A liability account on a company's balance sheet representing the amount of declared dividends that are to be paid out to shareholders.

Date of Declaration

The date on which a company's board of directors announces a dividend payment to shareholders.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains unchanged.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuing company.