When retained earnings are not enough to meet their long-term funding needs, businesses may be able to raise funds by:

A. selling common stock.

B. petitioning the government for a loan.

C. purchasing additional assets.

D. decreasing their accounts payable

Question

Business

Quinn Miranda

29 March, 06:59

When retained earnings are not enough to meet their long-term funding needs, businesses may be able to raise funds by:

A. selling common stock.

B. petitioning the government for a loan.

C. purchasing additional assets.

D. decreasing their accounts payable

+3

Answers (1)

Know the Answer?

Pierre Wells · Answer 1

A. selling common stock.

Explanation:

A business raises capital through debt or equity. Debts represent borrowed funds, which include bonds and loans. Equity represents the owner's funds, which comprises of shares and retained earnings.

Should a business not have enough funds for its long term needs, it can sell more shares to the existing shareholders or the general public. Shares represent ownership of the company. Selling common stock means that the company will receive the funds it requires in exchange for ownership rights. Shareholder earns dividends as a reward for providing capital to businesses.

When retained earnings are not enough to meet their long-term funding needs, businesses may be able to raise funds by:A. selling common stock.B. petitioning the government for a loan.C. purchasing additional assets.D. decreasing their accounts payable

When retained earnings are not enough to meet their long-term funding needs, businesses may be able to raise funds by:

A. selling common stock.

B. petitioning the government for a loan.

C. purchasing additional assets.

D. decreasing their accounts payable