Question

When businesses cannot use retained earnings to meet their long-term funding needs they may be able...

When businesses cannot use retained earnings to meet their long-term funding needs they may be able to raise funds by?

a)purchasing additional assets.

b)corporate trading market.

c)selling common stock.

d)initial offerings market.

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Homework Answers

Answer #1

Answer:

Option C: Selling the common stock

Explanation:

Purchasing additional assets would result in an outflow of funds, not inflows.

When business is not able to use retained earnings, corporate trading market, and initial offerings market may not be the right options for raising additional long-term funds.

The best way to raise funds for long term funding needs after retained earnings is issuing the shares in the trading market.

Therefore, Selling the common stock is the appropriate option for the given scenario.

Hence,

Option 'C' is correct and rest all are incorrect.

In case of any doubt, please feel free to comment.

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