which of the following is an example of debt financing? a.) a farm owner creates working capital by selling…

which of the following is an example of debt financing? a.) a farm owner creates working capital by selling 500 shares of their company. b.) a farm owner receives an annual grant payment on june 1, 2020. c.) a farm owner decides to borrow money to fund business operations from a bank. d.) a farm owner obtains a large cash infusion for new equipment from an angel investor.

which of the following is an example of debt financing? a.) a farm owner creates working capital by selling 500 shares of their company. b.) a farm owner receives an annual grant payment on june 1, 2020. c.) a farm owner decides to borrow money to fund business operations from a bank. d.) a farm owner obtains a large cash infusion for new equipment from an angel investor.

Answer

Brief Explanations:

Debt financing involves borrowing money that must be repaid. Selling shares (a) is equity financing. A grant (b) doesn't need to be repaid. Money from an angel - investor (d) is often equity - related. Borrowing from a bank (c) creates a debt obligation.

Answer:

c. A farm owner decides to borrow money to fund business operations from a bank.