Sources of Business Finance Quiz 11 commerce

Which of the following is an internal source of finance?

• Trade credit

• Debentures

• Retained earnings

• Bank loan

The cost of which type of financing is generally the lowest?

• Equity

• Debt

• Preference shares

• Public deposits

What is the main advantage of equity financing?

• Fixed repayment schedule

• No interest obligation

• Tax benefits

• High risk for investors

Which type of share guarantees a fixed dividend to the shareholders?

• Equity shares

• Preference shares

• Debentures

• Public deposits

Which of the following is not a short-term source of finance?

• Trade credit

• Commercial paper

• Debentures

• Bank overdraft

Debentures are considered a type of:

• Equity financing

• Short-term financing

• Long-term financing

• Working capital financing

What is the primary risk of debt financing for a business?

• Ownership dilution

• Tax benefits

• Obligation to repay with interest

• No voting rights

Which of the following financing options is most suitable for a seasonal business?

• Equity

• Trade credit

• Preference shares

• Public deposits

Public deposits are raised directly from:

• Financial institutions

• Shareholders

• The general public

• Banks

Which source of financing provides the business with working capital for day-to-day operations?

• Equity shares

• Trade credit

• Debentures

• Retained earnings