Asked by Courtney Morris on Jun 09, 2024
Verified
Which is an example of debt financing?
A) Issuing stock to raise capital
B) Using the company's earnings to fund a project
C) A leasing agreement
D) Issuing bonds to raise capital
Debt Financing
The practice of borrowing funds from external sources, typically through loans or bonds, to finance business activities.
Issuing Bonds
The act of a corporation or government borrowing money from investors by selling debt securities, known as bonds, which promise to repay the principal along with interest on specified dates.
Leasing Agreement
A contract where one party agrees to rent property owned by another party for a specified time period in exchange for payment.
- Identify the differences between borrowing (debt financing) and raising money through the sale of shares (equity financing).
Verified Answer
Learning Objectives
- Identify the differences between borrowing (debt financing) and raising money through the sale of shares (equity financing).
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