General Studies · Financial Management
Given NexusTech's financial position and desire to minimize long-term fixed financial commitments, which of the following financing options would be most suitable for its expansion, and what is a key advantage of this option in the context of its strategic objective?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Financing Option: Convertible debt; Key Advantage: Guarantees fixed returns for initial investors without diluting current ownership.
- 2Financing Option: Venture capital funding; Key Advantage: Retains full ownership control for existing shareholders.
- 3Financing Option: Issuing new equity shares; Key Advantage: No fixed repayment obligations, providing financial flexibility.✓
- 4Financing Option: Long-term bank loan; Key Advantage: Lower cost of capital due to tax-deductible interest.
Correct answer
Financing Option: Issuing new equity shares; Key Advantage: No fixed repayment obligations, providing financial flexibility.
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