Internal Finance
Capital raised from within organization: owner's capital, retained profits, asset sales.
Real World
Apple regularly funds share buybacks and R&D using retained profits — in 2023 it had over $160 billion in retained earnings, allowing massive investment without borrowing or diluting shareholder equity.
Exam Focus
Stress that internal finance avoids interest and maintains control — but always counter with the opportunity cost of using retained profit.
How well did you know this?