Sources of Funds For Businesses - SS1 Economics Past Questions and Answers - page 1
Which of the following is not a source of funds for businesses?
Equity financing
Debt financing
Government financing
Asset financing
What is equity financing?
Borrowing money from lenders
Obtaining funding from government grants
Raising funds by selling shares of ownership in the company to investors
Reinvesting profits back into the business
Which of the following is an example of debt financing?
Crowdfunding
Retained earnings
Bank loan
Government grant
What is government financing?
Raising funds by selling shares of ownership in the company to investors
Borrowing money from lenders
Obtaining funding from government grants, loans, or tax credits
Reinvesting profits back into the business
What is crowdfunding?
Raising funds by selling shares of ownership in the company to investors
Borrowing money from lenders
Obtaining funding from government grants, loans, or tax credits
Raising funds from a large number of people through online platforms
What is retained earnings?
Reinvesting profits back into the business rather than paying them out as dividends to shareholders.
What is the main difference between equity and debt financing?
Equity financing involves selling shares of ownership in the company to investors, while debt financing involves borrowing money from lenders and repaying it with interest over a specific period.