n NISM Certifications
XV NISM Series XV
Medium

Which of the following is considered a source of internal financing for a company?

Practice question from NISM XV Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Issue of equity shares

  2. Retained earnings

    Correct answer

  3. C

    Bank loans

  4. D

    Debentures

Why this is the answer

Internal financing refers to funds generated within the company, such as retained earnings, depreciation funds, or reserves. External financing comes from sources like equity issuance, loans, or debentures. Retained earnings allow a company to reinvest in its operations without relying on outside capital.

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