Westbro Inc., a home appliances company, wants to invest in marketing new products. In order to generate funds for the process, it issues its own formal IOUs and sells them to its investors. Which of the following sources of long-term funds is being used by Westbro Inc. in the given scenario?
A) Direct investments from owners
B) Corporate bonds
C) Trade credit
D) Term loans

Question

Quizplus · Accepted Answer

Westbro Inc. is using corporate bonds as a source of long-term funds by issuing formal IOUs to investors, which is a common method for companies to raise capital.