When business is profitable, corporate managers will prefer plowback rather than other sources of funding.

Question

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When a business is profitable, corporate managers may prefer plowback (reinvesting profits back into the business) over other sources of funding such as borrowing or issuing equity, as it allows them to retain control and ownership of the business while potentially generating higher returns in the future.

When Business Is Profitable, Corporate Managers Will Prefer Plowback Rather