What are the primary sources of financing activities for a corporation?

The primary sources of financing activities for a corporation are indeed borrowing money and issuing shares of stock. These activities are essential for providing the capital necessary for a corporation to operate and expand. When a corporation borrows money, it typically takes out loans or issues bonds, which creates a liability that needs to be paid back over time. This borrowing allows the company to fund projects, invest in new ventures, or cover operational costs without requiring the immediate cash outlay that would be necessary if they were to rely solely on existing cash reserves.

Issuing shares of stock is another core financing activity. When a corporation sells shares to investors, it raises equity capital. This capital can be utilized for various purposes, such as research and development, purchasing equipment, or other investments that can help propel growth. Equity financing also has the advantage of not needing to be repaid, unlike debt financing.

Together, these two methods are fundamental for a corporation's financing strategies, allowing them to fuel growth while managing liabilities effectively. The other options do not directly represent primary financing activities. Retained earnings, while significant, are the profits retained in the business and not a source of financing in the same way that borrowing or issuing stock is. Tax refunds and sales revenue are part of operations and