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Which method of corporate finance is predominately used by "GROWTH companies"?

A-retained earnings
B-new stock issues
C-borrowing
D-none of these are used by “growth companies"

User Csi
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Answer:

The method of corporate finance that is predominately used by "GROWTH companies" is B: "new stock issues."

Step-by-step explanation:

Growth companies are companies that are expanding rapidly and reinvesting their profits back into the business to fuel further growth. As such, they typically need to raise additional capital to support their expansion plans. One way they can do this is by issuing new stock, which allows them to sell ownership stakes in the company to investors in exchange for funding. This can be an attractive option for growth companies because it does not require them to take on debt, which can be costly and risky, and it also does not reduce their retained earnings, which they can continue to reinvest in the business. Retained earnings and borrowing are also commonly used methods of corporate finance, but they may not be as suitable for growth companies depending on their specific circumstances.

User Sapna Sharma
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