Manitoba Hydro has steady, predictable profits and cash flow patterns. Its best choice for long-term funding is most likely
A) factoring accounts receivable.
B) common stock.
C) either common or preferred stock but not bonds.
D) preferred stock.
E) bonds.

Question

Quizplus · Accepted Answer

Manitoba Hydro's steady and predictable profits and cash flow patterns make it a good candidate for long-term funding through bonds. Bonds typically offer lower interest rates than other options like preferred or common stock, and the reliable income stream from Manitoba Hydro enables it to make regular interest payments to bondholders. Additionally, issuing bonds does not dilute ownership in the same way that issuing stock does.

Manitoba Hydro Has Steady, Predictable Profits and Cash Flow Patterns