BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Debt finance can be obtained from two sources formal and informal sources
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TRUE
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FALSE
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Explanation:
Detailed explanation-1: -In simple terms, formal finance is financing capital that has been sourced from banks and other formal financial intermediaries, whereas informal finance is the capital which has been sourced from friends, family, relatives or private moneylenders (Elston et al.
Detailed explanation-2: -What are the two major forms of debt financing? Debt financing comes from two sources: selling bonds and borrowing from individuals, banks, and other financial institutions. Bonds can be secured by some form of collateral or unsecured.
Detailed explanation-3: -Debt financing involves borrowing money and paying it back with interest. The most common form of debt financing is a loan.
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