The First National Bank of Tucson has determined that the value of their property in Tucson has tripled in the last three years.They decide that they would like to use this property to raise funds and will rent space from the new owners of the building.What way of meeting their capital needs is the bank taking?

Question

Quizplus · Accepted Answer

The bank is selling their property and leasing space from the new owners, which suggests that they are raising funds by selling assets and leasing facilities. This is a common way for companies to meet their capital needs. Options A and B (issuing common or preferred stock) involve issuing new shares of ownership in the company and would not be related to selling property. Option C (issuing subordinated notes and debentures) involves issuing debt instruments, which is not mentioned in the scenario. Option E (swapping stock for debt instruments) also involves a transaction with existing shares of stock, not property.

The First National Bank of Tucson Has Determined That the Value