If companies can rely on stock markets to obtain funds, they will have to rely more heavily on the ____ market to raise long-term funds.

Question

Quizplus · Accepted Answer

If companies are able to obtain funds from the stock market, it means they are able to obtain short-term funds. Long-term funds are needed for investments in large capital projects, research and development, and to expand operations. Therefore, the most appropriate market to raise long-term funds is the long-term credit market.

If Companies Can Rely on Stock Markets to Obtain Funds