Raising funds through ________ is called indirect finance.

Question

Quizplus · Accepted Answer

Indirect finance refers to raising funds through financial intermediaries like banks, mutual funds, insurance companies, etc. Issuing stock (A) and bonds (B) are both examples of direct finance, where firms raise funds directly from investors. Retaining earnings (D) refers to reinvesting the profits of a company into its operations instead of distributing them as dividends to shareholders. While retaining earnings can provide funding for a company, it is not considered a form of finance as it does not involve obtaining new funds from external sources.

Raising Funds Through ________ Is Called Indirect Finance