The two primary sources of equity financing are:
A) trade credit and commercial paper.
B) stockholder investments and retained earnings.
C) owner debt structure and factoring.
D) liquid assets and selling of corporate bonds.

Question

Quizplus · Accepted Answer

The two primary sources of equity financing are stockholder investments and retained earnings. Stockholders invest in a company by purchasing shares of stock, which represents partial ownership in the company. Retained earnings, on the other hand, refers to the profits that a company has kept instead of distributing them as dividends. Both of these sources involve giving up ownership in the company in exchange for funds, which is the essence of equity financing.

The Two Primary Sources of Equity Financing Are