which of the following is not a source of short term finance ?
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Answer:
equity financing
Step-by-step explanation:
Equity finance is a method of raising fresh capital by selling shares of the company to public, institutional investors, or financial institutions. The people who buy shares are referred to as shareholders of the company because they have received ownership interest in the company. It is one of sources of the long term financing.
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Correct Question:
Which of the following is not a source of short term finance?
- Trade Credit
- Installment Credit
- Customer Advances
- Equity Financing
Answer:
The required answer which is not a source of short term financing is option (d) Equity Financing.
Step-by-step explanation:
- Equity finance may be a method of raising fresh capital by selling shares of the company to public, institutional investors, or financial institutions.
- The people that buy shares are referred to as shareholders of the company because they have received ownership interest in the company. it's one of sources of the long term financing. Equity financing involves selling some of a company's equity in return for capital.
- For instance , the owner of Company ABC might have to raise capital to fund business expansion. The owner decides to offer up 10% of ownership in the company and sell it to an investor in return for capital. That investor now owns 10% of the corporate and has a voice in all business decisions going forward.
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