Which method of corporate finance is used the most? Why?
What will be an ideal response?
Reinvestment accounts for about 75 percent of new financial capital for corporations. Smaller corporations may find it difficult to find people willing to buy shares of stock, and the existing owners may not want other owners involved in electing directors. Smaller firms may also have a difficult time getting people to lend to them. So, they have to rely on reinvesting profits.
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Refer to Figure 11-4. Which of the following combinations of points illustrates changes in the Soviet Union's economy from 1950 to 1980?
A) A to B to C B) B to D C) B to E D) E to B
Which of the following is not true of collective decision-making costs?
a. They impede collective action. b. They are the reason why unanimity rule is not the optimal decision-making rule. c. They imply that simple majority rule is the optimal decision-making rule. d. They increase the closer the decision rule gets to unanimity.