Question

Describe at least two sources you would use for funding your company. (1-2 sentences. 2.0 points)

Answer 1

The two sources you would use are as follows :

• Retained Earnings.
• Get loan from bank.

Step-by-step explanation:

Retained Earnings : By selling products or services for more than its real cost value a company should exists to make a profit. This can be the most basic form for funding your company and hopefully this method is termed as retained earnings.

Get loan from bank : It is also known as Dept capitals. Borrowing money can be done privately from banks, and publicly through debt issue which is known as corporate bonds.

Hence, these two sources will definitely helps you for funding the company.

Answer 2

1. I will use stock funds also known as equity funding
2. Get loan from the bank

Explanation

Equity funding or use of stock funds is where one uses mutual funds that principally invests in stocks.. They are normally categorized according to the size of your company, the range of investment held by your company and the investment style. Equity funds is simple because you just need to give money to a fund which invests it in stocks. stocks are shares which entitles the holder to to a fixed divided. Its advantage is that it provides higher returns on the investments.

Bank loans is also a common way to fund a company, This provides medium or long term finances according to the size of your company or the organisation you want to fund. The bank will set a fixed period over which you will pay back at at a certain interest rates.