When a business has been profitable and needs to invest, its preferred method of financing will likely be

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Plowback refers to the reinvestment of profits back into the business, which allows the company to finance growth and expansion without incurring additional debt or diluting ownership through stock issuance. This is typically the preferred method of financing for a profitable business that wants to invest in its own growth. Bond sales and equal issues of stocks and bonds may be appropriate in certain circumstances, but they involve additional costs and risks that may not be necessary if the company has sufficient profits to reinvest. Stock issuance may also dilute existing shareholders' ownership stake in the company.

When a Business Has Been Profitable and Needs to Invest