Abercrombie & Fitch Wants to Raise $8 Million to Finance

question 181

Multiple Choice

Abercrombie & Fitch wants to raise $8 million to finance the construction of a new store, and the company wishes to raise the funds through direct finance.Which of the following methods could it use?

• A)It could sell $8 million in bonds.
• B)It could borrow $8 million from a bank.
• C)It could issue $8 million in stocks.
• D)It could choose either A or C.

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Definitions:

Stock Dividend

A distribution of additional shares to the existing shareholders of a company, proportionate to their current shareholding.

Ratification

Ratification is the act of officially approving or confirming a decision or agreement, often used in the context of treaties, contracts, or other legal documents.

Authorized Act

An action taken by an individual or entity that has been given official permission or power to do so, typically within a legal or organizational context.

Corporation's Acceptance

The formal agreement by a corporation to abide by legal obligations or contracts, often signified through a resolution by its board of directors.