Describe and explain the three principle methods of financing used by corporations
What will be an ideal response?
Corporations raise funds by selling stocks, selling bonds, and reinvesting profits. A share of stock is a form of ownership in the firm and entitles the owner to a share of future profits. A person who buys a bond from a firm is lending the firm money. Finally, if the firm earns profits, it can use some of them for investment rather than pay them all out to stockholders as dividends.
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The figure above shows Sam's budget line. Sam's budget line shows
A) which combinations of gasoline and coffee Sam can afford. B) which combinations of gasoline and coffee Sam is planning to purchase. C) whether or not Sam thinks gasoline and coffee are worth their prices. D) whether or not Sam currently has enough gasoline and enough coffee.
All of the following are macroeconomic injections into the circular flow except:
a. Consumption b. National government spending c. State and local government spending d.All of the above. e. None of the above.