One advantage in using retained earnings as a long-term source of funds is ________.
a) there is no advantage because retained earnings are only used for short-term financing
b) retained earnings are funds that fundamentally belong to bondholders, and as such, their use does not dilute ownership
c) firms avoid having to make dividend payments to stockholders, or interest payments to bondholders
d) firms pay a higher interest rate for the use of these funds, which benefits the business in the long-run
Answer: C