Asked by Nadia Kovacs on May 22, 2024
Verified
Melissa is the financial manager for Branson Inc.and has decided to raise additional funds for the company by raising equity capital.She might do so by
A) selling bonds.
B) persuading existing owners to contribute additional funds.
C) selling marketable securities.
D) establishing a line of credit with a local bank.
Equity Capital
Funds raised by a company in exchange for shares of ownership.
Selling Bonds
The act of issuing debt securities by governments or corporations to investors in order to raise capital, with an obligation to pay back with interest.
Marketable Securities
Financial instruments that can be easily sold or bought on public stock and bond markets.
- Gain an understanding of the features and variances between different financial sources like debt capital, equity capital, commercial paper, and venture capital.
Verified Answer
KP
Kaleice PorchiaMay 25, 2024
Final Answer :
B
Explanation :
Raising equity capital involves increasing the company's capital through the contribution of new funds by the existing owners or by issuing new shares. Option B directly refers to persuading existing owners to contribute additional funds, which is a method of raising equity capital. Options A, C, and D refer to debt financing or other forms of financing that do not involve raising equity capital.
Learning Objectives
- Gain an understanding of the features and variances between different financial sources like debt capital, equity capital, commercial paper, and venture capital.