Which of the following, if true, strengthens the case for Munschausen's seeking to acquire capital by equity financing?
A) Most investors are not currently expressing interest in German companies.
B) Munschausen is not sure whether its international sales will be profitable.
C) Munschausen employs some of the best engineers in Germany.
D) Munschausen will get savings through economies of scale by producing in greater quantity.
E) Several venture capitalists are interested in investing in Munschausen.
Answer: E
Explanation: E) Financing by equity is preferable to debt financing because of the liability involved in indebtedness, so if Munschausen can get equity financing from investors, this would be a good option. Choices A and B weaken the case that Munschausen could successfully acquire equity financing. Choices C and D are not relevant to whether Munschausen could or should acquire capital by equity financing.
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