Rexton Pharmaceuticals needs to raise funds to buy new production equipment.The financial manager would probably suggest that his company raise debt capital by _____.

Question

Quizplus · Accepted Answer

The best choice for Rexton Pharmaceuticals to raise funds for buying new production equipment would be to borrow money from a bank. This is because borrowing money involves raising debt capital, and it allows the company to acquire the funds needed without diluting ownership by selling equity (stocks). Additionally, using accumulated earnings or selling marketable securities may not provide enough funds to purchase new production equipment.

Rexton Pharmaceuticals Needs to Raise Funds to Buy New Production