Some companies use debt or preferred stock financing instead of common stock financing. The purpose is to ____.
A) retain control
B) facilitate record-keeping
C) maintain privacy
D) prevent audit problems

Question

Quizplus · Accepted Answer

By using debt or preferred stock financing, companies are able to raise money without diluting their ownership or control of the company. Unlike common stock, debt and preferred stock do not give investors voting rights or the ability to influence major decisions. This allows the company to retain control while still raising capital.

Some Companies Use Debt or Preferred Stock Financing Instead of Common