Companies can raise an unlimited amount of cash from financing activities as long as they are willing to pay higher interest rates.

Question

Quizplus · Accepted Answer

Companies cannot raise an unlimited amount of cash from financing activities due to factors like market conditions, creditworthiness, regulatory limits, and investor appetite, which constrain their ability to borrow or issue equity regardless of the interest rate they are willing to pay.

Companies Can Raise an Unlimited Amount of Cash from Financing