Which of the following statements concerning external sources of financing for nonfinancial businesses in the United States are true?
A) Issuing marketable securities is the primary way that they finance their activities.
B) Bonds are the least important source of external funds to finance their activities.
C) Stocks are a relatively unimportant source of finance for their activities.
D) Selling bonds directly to the American household is a major source of funding for American businesses.

Question

Quizplus · Accepted Answer

Nonfinancial businesses in the United States primarily rely on bank loans and retained earnings to finance their activities. Issuing marketable securities, such as stocks and bonds, is less common and typically reserved for larger, more established firms. While bonds may still be used by some businesses, they are generally a less important source of external funds compared to bank loans and retained earnings. Selling bonds directly to American households is not a major source of funding for American businesses.

Which of the Following Statements Concerning External Sources of Financing