Question

As a financial manager for a very profitable manufacturer of specialty steel, Kurt has been asked to investigate sources of long-term funds to finance the construction of a new facility. Kurt would prefer a funding source that does not require interest payments or involve major underwriting fees. Kurt will consider using retained earnings to fund the construction project.
true/false

Answer 1

Answer: True

Explanation:

He is planning to use the retained earnings that are the result of the net profit plus the accumulated of the previous year, this with the purpose of not paying interest for the financing of his investment, another way of making an investment and not generating interest is that they are obtained a new financing of capital by the shareholders, which will be capitalized to equity and will not require the payment of interest only from dividends according to the parties but definitely, the only way that an interest or a portion to be paid by part is not generated of investment is what.