Question

Timoth Steels, a steel manufacturing company, wants to install a new factory in Temenia. The company decides to use funds from its own account and refrain from borrowing money from banks. Which of the following sources of long-term funds is being used by Timoth Steels in the given scenario?A. Term loansB. Corporate bondsC. Direct investments from ownersD. Long-term debt

Answer 1

Answer: C.

Direct investments from owners

Explanation: Direct investment generally refers to situations in which a company has established manufacturing facilities in any wholly-owned, either through a wholly owned subsidiary or as a joint venture partner with a partial ownership stake.

Direct investments are those in which the investor owns the particular assets himself.