Firms in need of financing tend to use external funds first and then revert to internal funds,or retained earnings,as a last resort.

Name: Firms in need of financing tend to use external funds first and then revert to internal funds,or retained earnings,as a last resort.
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Question

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Firms typically prefer to use internal funds or retained earnings first due to lower costs and fewer restrictions, and they resort to external financing as a secondary option when internal funds are insufficient.

Firms in Need of Financing Tend to Use External Funds