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?(1 point)

Question

Responses

Banks will likely offer disappointingly low interest rates.
Banks will likely offer disappointingly low interest rates.

Involving a bank will likely make borrowing more expensive.
Involving a bank will likely make borrowing more expensive.

Changes in the stock market.
Changes in the stock market.

The types of saving accounts a bank offers.

Answer 1

When directors are considering the type of funding to pursue for their expansion plans, the most relevant factor to keep in mind from the provided options is changes in the stock market.

This is because fluctuations in the stock market can impact a company’s ability to raise funds through equity financing (i.e., issuing new shares) or affect the terms of debt financing. It's important for the directors to assess the current market conditions and investor sentiment to determine the most advantageous approach for securing the necessary capital. Other factors like interest rates from banks, the costs of borrowing, and bank savings account types are less directly relevant to the immediate need for expansion funding.