Business Studies

The cheapest source of finance is _____________.


ANSWER

Retained Earnings


SOLUTION
Financing decision involves identification of various available sources. The main sources of funds for a firm are shareholders funds and borrowed funds. Shareholders funds refer to equity capital and retained earnings. Borrowed funds refer to finance raised as debentures or other forms of debt. Retained earnings are the part of funds which are available within the business and is hence a cheaper source of finance.
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Single Correct Medium Published on 18th 08, 2020
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