Of the following sources of external finance for Canadian nonfinancial businesses, the least important is ________.
A) loans from banks
B) stocks
C) bonds and commercial paper
D) loans from other financial intermediaries

Question

Quizplus · Accepted Answer

Stocks are the least important source of external finance for Canadian nonfinancial businesses as compared to loans from banks, bonds and commercial paper, and loans from other financial intermediaries. This is because issuing stocks involves giving ownership to investors, which many firms may be unwilling to do. Additionally, stocks tend to be more volatile and risky than debt financing through loans and bonds. Therefore, most Canadian nonfinancial businesses prefer to rely on debt financing options such as loans from banks and bonds rather than equity financing through stocks.

Of the Following Sources of External Finance for Canadian Nonfinancial