The financing option that has the lowest risk to a company is:
A)financing by issuing stock.
B)financing by issuing bonds payable.
C)financing by retained earnings.
D)financing by issuing notes payable.

Question

Quizplus · Accepted Answer

Financing by retained earnings is the financing option with the lowest risk to a company as it does not involve any debt and is funded by the company's own profits. This option also does not dilute the ownership of existing shareholders, as opposed to issuing stock. Issuing bonds payable and notes payable involve taking on debt, which increases the company's financial risk.

The Financing Option That Has the Lowest Risk to a Company