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Author Question: The means by which a company is financed refers to the firm's ________. A) capital budgeting B) ... (Read 14 times)

anshika

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on: Jul 10, 2018
The means by which a company is financed refers to the firm's ________.
 
  A) capital budgeting
  B) capital structure
  C) accounts receivable management
  D) working capital management

Question 2

Define money market and capital market and give an example of a security that trades in each.
 
  What will be an ideal response?

Question 3

Give an example of how a corporate manager might use the capital markets in the operation of his/her corporation. Be sure to define capital market in your answer.
 
  What will be an ideal response?


sabina576

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: B

Answer to Question 2

Answer: The money market is the term for the market for short-term, low-risk, highly liquid, homogeneous securities such as Treasury bills, negotiable certificates of deposit or commercial paper. The capital market consists of transactions in longer-term financial assets such as stocks and bonds.

Answer to Question 3

Answer: There are several acceptable examples a student can list for this question, for example:
The capital market is the market for longer-term financial assets such as stocks and bonds. The financial manager must finance the purchase of long-term assets and will often enter the capital market to raise sufficient funds by issuing new stock or bonds.


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