Final answer:
It is false(2) that the sale of shares of stock is a corporation's only source of capital. Corporations can issue bonds, take loans, reinvest profits, and obtain investments from private investors, in addition to selling stocks.
Step-by-step explanation:
The statement that the only source of capital for a corporation is the sale of shares of stock is false(2). Corporations have multiple options for raising capital. One primary method is through issuing shares of stock, which could be via an Initial Public Offering (IPO), secondary offerings, or treasury stock. However, they can also raise funds through issuing bonds, such as Treasury bonds, and by other means such as taking loans and reinvesting profits back into the company. Shareholders, or the owners of the shares of stock, provide the corporation with capital in exchange for partial ownership and a stake in the company's future profits, but they are not the sole means of funding for a corporation.
Besides selling stock, companies can also obtain early-stage financial capital from personal savings, credit cards, and private investors, such as angel investors and venture capital firms. Moreover, a corporation may also finance its operations through retained earnings from its profits. Thus, the sale of shares of stock is just one of several ways a corporation may raise capital.