XYZ Corporation needs to raise money for an expansion into a new market. The company decides to borrow the money in the financial market. What does XYX likely do?
A) sell new shares of stock
B) issue new bonds
C) trade existing shares of stock
D) trade existing bonds

Question

Quizplus · Accepted Answer

When a company needs to raise money and decides to borrow it from the financial market, it typically issues new bonds. This is because bonds are a form of debt financing, where investors lend money to the company in exchange for the promise of future payments with interest. Selling new shares of stock would dilute existing ownership and is a form of equity financing, not borrowing. Trading existing shares or bonds does not raise new capital for the company.

XYZ Corporation Needs to Raise Money for an Expansion into a New