It is generally accepted that, on average, firms can be more efficient as a source of funds for a new business than the external capital markets they replace.

Question

Quizplus · Accepted Answer

Firms typically rely on external capital markets to raise funds because these markets can offer a wider range of financing options and potentially lower costs of capital compared to internal funding sources. External markets provide access to a broader pool of investors, which can lead to more efficient capital allocation.

It Is Generally Accepted That, on Average, Firms Can Be