Question

Corporations normally are financed by ______. One type of security consists of borrowing funds and is called a ________. The other main type of security consists of ownership in the corporation and is called a_________ , or equity security.

Answer 1

securities

bond

stock

Step-by-step explanation:

Corporations source their finances from issuing securities. If they borrow from banks or other corporations or from investors, then that is considered debt. They can also borrow debt by issuing bonds which are fixed securities which can either be paying coupons periodically or not. If they do not have debt financing, they can sell part of company ownership to investors by issuing stocks and pay dividends to them in return.