Which Two of the Following Are Generally Used to Fund

question 25

Multiple Choice

Which two of the following are generally used to fund the external financing need?
I. sale of fixed assets
II. increase in accounts payable
III. issuance of long-term debt
IV. sale of equity securities

• A)I and II
• B)I and III
• C)II and III
• D)II and IV
• E)III and IV

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Definitions:

Ownership Percentage

The fraction or percentage of a company that is owned by a shareholder or group of shareholders.

Voting Shares

Shares that give the shareholder the right to vote on corporate matters.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.

Additional Shares

Extra shares issued by a company, which can result from financing activities, stock splits, or dividend reinvestment plans.