Most corporations rely primarily on retained earnings to meet their funding needs, but these earnings may not always be sufficient to match the investment expenditures a corporation would like to make and therefore the firm needs to turn to the debt and equity markets.

Question

Quizplus · Accepted Answer

Corporations often use retained earnings as a primary source of funding because it does not incur additional costs. However, when these are insufficient for investment needs, they seek external financing through debt and equity markets.

Most Corporations Rely Primarily on Retained Earnings to Meet Their