As an Alternative to Selling Shares of Stock as a Means

question 185

Multiple Choice

As an alternative to selling shares of stock as a means of raising funds, a large company could, instead,

• A)invest in physical capital.
• B)use equity finance.
• C)sell bonds.
• D)purchase bonds.

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Definitions:

Appropriation

The allocation or setting aside of funds by a company for a specific purpose or the restriction of retained earnings distributed to shareholders.

Inventory Finance

A line of credit or loan specifically intended to help businesses purchase inventory, often secured by the inventory itself.

Long-Term Note

A debt obligation with a repayment period typically exceeding one year, often used for significant purchases or investment.

Refinancing

The process of replacing an existing loan with a new loan, typically to secure better interest rates or loan terms.