HISTORY
THE WORLD BETWEEN THE WARS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Raise money to build factories.
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Raise money to develop new products.
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Raise money to hire new workers.
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Raise money to buy other companies.
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Detailed explanation-1: -The main reason is financial leverage. Banks and other traditional lenders typically won’t provide loans to new companies, which is why startups need to seek out angel investors and venture capitalists.
Detailed explanation-2: -Equity capital is generated through the sale of shares of company stock rather than through borrowing. If taking on more debt is not financially viable, a company can raise capital by selling additional shares. These can be either common shares or preferred shares.
Detailed explanation-3: -A steadily rising share price signals that a company’s top brass is steering operations toward profitability. If shareholders are pleased, and the company is tilting towards success, as indicated by a rising share price, C-level executives are likely to retain their positions with the company.