After enjoying increased sales of and profits from several popular products, Braggs & Stritton plans to expand their production facilities. The firm, a well-known producer of lawn care products, prefers financing this project with a funding source that avoids interest and dividend payments as well as underwriting costs. Which of the following best meets the needs of Braggs & Stritton?
A) venture capital
B) debenture bonds
C) common stock
D) retained earnings

Question

Quizplus · Accepted Answer

Retained earnings are often the most favored source of meeting long-term capital needs since the company saves interest payments, dividend payments, and underwriting costs.

After Enjoying Increased Sales of and Profits from Several Popular