Another source of financing, in which an investor takes an ownership position in return for shares of stock in the company and the promises of capital gains, is called debt financing.

Question

Quizplus · Accepted Answer

The description given in the statement is actually referring to equity financing, not debt financing. Debt financing involves borrowing funds from lenders who expect to be repaid with interest, rather than taking on new owners in the company.

Another Source of Financing, in Which an Investor Takes an Ownership