Question
A corporation is looking to take advantage of market conditions and begin expanding as soon as possible. To do so, the company requires cash to purchase new buildings, machinery, and other capital goods. What should the directors keep in mind as they consider the type of funding to pursue?
a- the types of saving accounts a bank offers
b- banks will likely offer disappointingly low interest rates
c- involving a bank will likely make borrowing more expensive
d- changes in the stock market
a- the types of saving accounts a bank offers
b- banks will likely offer disappointingly low interest rates
c- involving a bank will likely make borrowing more expensive
d- changes in the stock market
Answers
GPT 3.5
c- involving a bank will likely make borrowing more expensive
When considering the type of funding to pursue for expansion, the directors should keep in mind that involving a bank in the borrowing process will likely make it more expensive. This is because banks typically charge interest rates on loans and have various fees associated with borrowing. The directors should evaluate the cost-effectiveness of bank loans compared to other funding options, such as issuing bonds or equity financing, to ensure they choose the most favorable option for their expansion plans.
When considering the type of funding to pursue for expansion, the directors should keep in mind that involving a bank in the borrowing process will likely make it more expensive. This is because banks typically charge interest rates on loans and have various fees associated with borrowing. The directors should evaluate the cost-effectiveness of bank loans compared to other funding options, such as issuing bonds or equity financing, to ensure they choose the most favorable option for their expansion plans.