A positive external funds requirement would indicate that the firm's financing is in excess of its needs and that funds would therefore be available for repaying debt, repurchasing stock, or increasing the dividend to stockholders.

Question

Quizplus · Accepted Answer

A positive external funds requirement means that the firm's financing needs exceed its available funds, indicating a need for external financing such as issuing stocks or bonds. It does not indicate a surplus of funds available for debt repayment, stock repurchase, or dividend increase.

A Positive External Funds Requirement Would Indicate That the Firm's