Financing the Business Firm
Objective 17-5 Describe the various ways that firms raise capital and identify the pros and cons of each method.
If you invest wisely, and your goal is to start your own firm, you may find yourself in a position to do so. However, that’s only the first step in the complicated process of financing a business. Every company needs cash to function. Although a business owner’s savings may be enough to get a new venture up and running, ongoing businesses depend on sales revenues to survive. When current sales revenues are insufficient to pay for expenses, firms tap into various other sources of funds, typically starting with the owners’ savings (as discussed in Chapter 15, owners usually contribute funds, or paid-in ...
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