Question

Amongst the following that is not short term means of raising capital_____.

• A. Loans from financial institutions
• B. Bills of exchange
• C. Promissory note
• D. None of the above

Answer 1

The correct option is A Loans from financial institutions

There are two main types of financing available for companies:debt and equity Debt is a loan that must be paid back often with interest, but it is typically cheaper than raising capital because of tax deduction considerations. Equity does not need to be paid back, but it relinquishes ownership stakes to the shareholder. Both debt and equity have their advantages and disadvantages. Most companies use a combination of both to finance operations.