True or False: External equity financing can be obtained through traditional means like selling stock.

External equity financing refers to raising funds from outside the company, typically through the sale of shares or stock to investors. When a company sells stock, it essentially allows investors to purchase a stake in the company, providing the organization with capital that can be used for various purposes, such as expansion, research, and development, or paying off debt.

The statement is true because traditional methods of obtaining external equity financing primarily involve issuing stocks to raise capital. This process is a common practice for corporations seeking to finance their operations without incurring debt, as it does not require repayment like loans do. Through public offerings or private placements, companies can attract a wide range of investors, thereby increasing their financial resources.

While other options hint at specific circumstances or conditions under which equity financing might be applicable, the core idea that selling stock is a traditional means to secure external equity financing remains accurate.