Businesses acquire long-term financing from two major sources,
A) debt financing and government funds.
B) equity financing and trade credit.
C) retained earnings and commercial paper.
D) debt financing and equity financing.

Question

Quizplus · Accepted Answer

Businesses acquire long-term financing from two major sources, debt and equity. Debt financing involves borrowing money from lenders or creditors, such as banks or bondholders, which must be repaid with interest. Equity financing involves selling ownership shares in the business to investors, which provides capital in exchange for a share of ownership and potential profits. Both options have advantages and disadvantages, and businesses often use a combination of debt and equity financing to balance their financial needs and goals.

Businesses Acquire Long-Term Financing from Two Major Sources