WGU D080 Module 11 Study Guide | Questions and Answers
complete solutions | A+ Graded | 2026 Updates | 100%
correct
Module 11: Decisions to Maximize Financial Outcomes
1. What are the sources of finance used by large companies? (See Lesson 40).
Explain the following:
a) cash- can be used to grow the company and expand its operations, and it basically amounts
to internal financing. It’s the cash that a company has earned by conducting its business.
They put some of it aside and they call it retained earnings, and they use these retained
earnings to finance the future growth and activities of the company.
b) loans- Are typically bank loans, and they are also referred to as debt.
c) bonds- Bonds are also referred to as debt.
* The reason loans and bonds or debt is less expensive is because interest that is paid in both of those
cases is tax deductible because it’s considered a business expense.
d) equity (stocks)- We pay dividends to shareholders. This is not tax deductible. Dividends are
paid to shareholder, but they are not considered business expenses. They are a percentage of
the profit that you are returning to your rightful owners, the shareholders. So, we are
distributing actually profit to the rightful owners. This is a more expensive form of finance
than loans or bonds. This is riskier and less reliable source of income.
e) Global Equity and motivation for companies to use it-
f) Global Loans and Bonds, and motivation for companies to use them
2. What are the sources of finance used by small companies? (See Lesson 40)
complete solutions | A+ Graded | 2026 Updates | 100%
correct
Module 11: Decisions to Maximize Financial Outcomes
1. What are the sources of finance used by large companies? (See Lesson 40).
Explain the following:
a) cash- can be used to grow the company and expand its operations, and it basically amounts
to internal financing. It’s the cash that a company has earned by conducting its business.
They put some of it aside and they call it retained earnings, and they use these retained
earnings to finance the future growth and activities of the company.
b) loans- Are typically bank loans, and they are also referred to as debt.
c) bonds- Bonds are also referred to as debt.
* The reason loans and bonds or debt is less expensive is because interest that is paid in both of those
cases is tax deductible because it’s considered a business expense.
d) equity (stocks)- We pay dividends to shareholders. This is not tax deductible. Dividends are
paid to shareholder, but they are not considered business expenses. They are a percentage of
the profit that you are returning to your rightful owners, the shareholders. So, we are
distributing actually profit to the rightful owners. This is a more expensive form of finance
than loans or bonds. This is riskier and less reliable source of income.
e) Global Equity and motivation for companies to use it-
f) Global Loans and Bonds, and motivation for companies to use them
2. What are the sources of finance used by small companies? (See Lesson 40)
