Question

The internal capital market deals with the allocation of internally generated cash between

a.
stockholders, creditors, and corporate capital projects.
b.
stockholders and managers.
c.
corporate capital projects of differing business segments within the corporation.
d.
capital gains and capital losses.

Answer 1

I believe the answer is corporate capital projects of differing business segments within the corporation.
The purpose to internal capital market is to allocate company's resources from one division of the company to another in order to diversify company's projects. This will reduce the risk of failure that companies would get when one of their project fail.