Why are Financial Markets Important for Businesses?
Financial markets provide businesses with several essential services:
Access to Capital: Companies can raise funds for expansion, operations, or debt repayment by issuing stocks or bonds. Liquidity: Businesses can quickly convert assets into cash, which is crucial for managing operational needs. Risk Management: Companies can hedge against various risks such as currency fluctuations, interest rate changes, and commodity price volatility using derivatives. Valuation: Financial markets provide a mechanism for pricing assets, which helps in assessing the value of a company.