BCL – L1 – SA – Q10 – Types of Capital

What is debt financing?

A   Selling company shares

B   Borrowing money

C   Allocating profits to shareholders

D   Investing in other companies

B

Explanation:

Debt financing involves borrowing money, typically through loans or bonds, to fund company activities. It does not involve selling shares (A), allocating profits (C), or investing in other companies (D). Option B is correct.