If companies cannot rely on stock markets to obtain funds, they will have to rely more heavily on the ____ market to raise long-term funds.

Question

Quizplus · Accepted Answer

The bond market is the primary market for companies to raise long-term funds outside of equity financing through the stock market. Bonds are debt securities that can be issued by companies to investors, providing them with a fixed maturity date and interest payments. Bondholders do not have any ownership rights in the company, unlike shareholders in the stock market.

If Companies Cannot Rely on Stock Markets to Obtain Funds