Sources Of Finance in Business Finance : Practice MCQ Questions & Answers with Explanations

1 practice sets · Page 1 of 1

Business FinanceEasySources Of FinanceEquity And Debt

1.

Which of the following is a long-term source of finance?

A

Commercial paper

B

Trade credit

C

Debentures

D

Cash credit

View Answer

Correct Answer: C — Debentures

Explanation:

The correct answer is C: Debentures.

Debentures are long-term debt instruments issued by companies to raise capital, typically with a fixed interest rate and a maturity period exceeding one year. Commercial paper and cash credit are short-term sources of finance. Trade credit is also a short-term source extended by suppliers.