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Under which condition is debt financing from financial institutions a suitable option for entrepreneurs?
  • a)
    When the entrepreneur wants to maintain full ownership of the business.
  • b)
    When the entrepreneur requires funds for short-term expenses.
  • c)
    When the government offers financial incentives for debt financing.
  • d)
    When other commercial banks are readily available for loans.
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Under which condition is debt financing from financial institutions a ...
Benefits of Debt Financing for Entrepreneurs

When the entrepreneur wants to maintain full ownership of the business:
Debt financing is a suitable option for entrepreneurs who want to maintain full ownership of their business. By taking out loans from financial institutions, entrepreneurs can raise capital without diluting their ownership stake. This allows them to retain control over decision-making and future profits.

Other Considerations:
- Debt financing may also be a preferred option when the entrepreneur believes that they can generate a higher return on investment than the cost of the borrowed funds.
- Additionally, debt financing can help entrepreneurs establish a credit history for their business, which may be beneficial when seeking future financing opportunities.
In conclusion, debt financing from financial institutions can be a suitable option for entrepreneurs who prioritize maintaining full ownership of their business while accessing the necessary funding to support growth and expansion.
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Community Answer
Under which condition is debt financing from financial institutions a ...
Debt financing from financial institutions is a suitable option for entrepreneurs who want to maintain full ownership of their business while obtaining the necessary funds.
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Under which condition is debt financing from financial institutions a suitable option for entrepreneurs?a)When the entrepreneur wants to maintain full ownership of the business.b)When the entrepreneur requires funds for short-term expenses.c)When the government offers financial incentives for debt financing.d)When other commercial banks are readily available for loans.Correct answer is option 'A'. Can you explain this answer?
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Under which condition is debt financing from financial institutions a suitable option for entrepreneurs?a)When the entrepreneur wants to maintain full ownership of the business.b)When the entrepreneur requires funds for short-term expenses.c)When the government offers financial incentives for debt financing.d)When other commercial banks are readily available for loans.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Under which condition is debt financing from financial institutions a suitable option for entrepreneurs?a)When the entrepreneur wants to maintain full ownership of the business.b)When the entrepreneur requires funds for short-term expenses.c)When the government offers financial incentives for debt financing.d)When other commercial banks are readily available for loans.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Under which condition is debt financing from financial institutions a suitable option for entrepreneurs?a)When the entrepreneur wants to maintain full ownership of the business.b)When the entrepreneur requires funds for short-term expenses.c)When the government offers financial incentives for debt financing.d)When other commercial banks are readily available for loans.Correct answer is option 'A'. Can you explain this answer?.
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