Firms obtain debt financing by selling stock shares to investors who then have an ownership interest in the firm.

Name: Firms obtain debt financing by selling stock shares to investors who then have an ownership interest in the firm.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Firms obtain debt financing by issuing debt securities (such as bonds) or obtaining loans from banks or other financial institutions. Selling stock shares to investors results in equity financing, which gives investors ownership in the firm but does not involve debt.

Firms Obtain Debt Financing by Selling Stock Shares to Investors