Why is plowback the overwhelming favorite among choices of sources of funds for financing corporate investment?
What will be an ideal response?
Plowback is usually less risky to management. It does not require prior scrutiny by the SEC nor does it depend on the availability of customers. The alternative sources, stock and bond issues, involve expensive and lengthy processes.
You might also like to view...
Which region in the New World received the largest share of slaves?
a. Brazil b. Colonial America c. Cuba d. Canada
Economists describe the stock market as being a ______.
a. wild ride b. random walk c. leisurely stroll d. dead run
In an open economy, if domestic citizens decide to save more, then the domestic real interest rate will ________ and the level of capital investment in the country will ________, holding other factors constant.
A. decrease; decrease B. decrease; increase C. increase; increase D. increase; decrease
For a perfectly competitive firm
A. price is greater than marginal revenue. B. price is less than marginal revenue. C. price equals marginal revenue. D. there is no relationship between price and marginal revenue.