Asked by Sapna Rathod on Jul 12, 2024
Verified
When a firm wants to borrow directly from the public to finance the purchase of new equipment, it does so by selling shares of stock.
Shares of Stock
Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.
- Identify the distinctions between bonds and stocks as methods of corporate financing.
Verified Answer
KB
kenya bernalJul 13, 2024
Final Answer :
False
Explanation :
Selling shares of stock is a way for a firm to raise equity financing, not borrow directly. Borrowing directly from the public typically involves issuing bonds or taking out loans.
Learning Objectives
- Identify the distinctions between bonds and stocks as methods of corporate financing.