Final answer:
True, firms can fund new productions by taking out loans or offering stocks. Loans require fixed repayments and allow firms to retain control, whereas stock offerings involve selling a portion of the company's ownership and responding to a board of directors and shareholders.
Step-by-step explanation:
Taking out loans and stock offerings are indeed ways to fund new productions. These methods are part of the broader context of a firm choosing how to access financial capital. Taking a loan, whether it's from a bank or through issuing bonds, commits a firm to scheduled interest payments. The advantage of this method is that it allows the firm to retain operational control since it does not involve taking on new shareholders. Conversely, issuing stock involves selling company ownership to the public, which requires answering to a board of directors and the shareholders. This can dilute control but does not impose the same fixed financial repayment burdens as loans do.
On the other hand, issuing stock involves selling off ownership of the company to the public and becoming accountable to a board of directors and shareholders.