If a firm sells shares of stock, it is financing with
A) debt.
B) liabilities.
C) spectator capital.
D) equity.

Name: If a firm sells shares of stock, it is financing with A) debt. B) liabilities. C) spectator capital. D) equity.
Brand: Quizplus
Rating: 4.9 (44 reviews)

Question

Quizplus · Accepted Answer

Selling shares of stock represents an issuance of equity, as it involves raising capital by selling ownership in the company to investors. It is not debt, as stockholders do not have a repayment obligation. It is also not liabilities or spectator capital.

If a Firm Sells Shares of Stock, It Is Financing