Which of the following methods can a company use to raise cash?

Prepare for your Evercore Equity Capital Markets Interview. Study with comprehensive questions, flashcards, hints, and detailed explanations. Ace your interview process!

Selling stock is a well-established method for a company to raise cash. By issuing shares, a company can obtain immediate funds from investors who buy the stock. This capital can be used for various purposes, such as funding expansion projects, paying off debt, or supporting operations. When a company goes public or conducts a secondary offering, it taps into the equity markets, allowing it to obtain the necessary cash without the obligation to repay it as it would with a loan.

Increasing employee salaries or hiring more workers are strategies that typically require the company to expend cash rather than raise it. These actions can lead to higher operational costs, rather than generating additional funds. Reducing expenses without generating revenue might conserve cash in the short run, but it does not fundamentally raise new funds for the company to utilize in growth or investment opportunities. Therefore, these methods do not align with the goal of cash raising in the same way that selling stock does.

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