A Firm Can Fund an Expansion of Its Operations by

question 58

Multiple Choice

A firm can fund an expansion of its operations by

• A)issuing bonds.
• B)buying stock.
• C)paying dividends.
• D)loaning money.
• E)paying bonuses.

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Definitions:

Commercial Bank Loans

are loans that businesses and individuals can obtain from a commercial bank to finance various needs, such as business expansion or personal expenses.

Short-Term Financing

Refers to borrowing funds for a period of less than one year to meet immediate financial requirements.

Spontaneous Financing

Financing that naturally increases as a firm's operating levels increase, typically through trade credits and accruals.

Five Year Bonds

Debt securities issued with a maturity of five years, typically paying interest semi-annually.