One of the sources of this funding is called common equity and there are two ways to go about raising it. First, the company can [ Select ] . This means that they set aside some of the profit for the year and instead of paying it out to shareholders as a dividend, they reinvest it. Second, the company can raise common equity, the firm has to issue a new stock . Companies generally prefer to [ Select ] to finance their projects and only [ Select ] when they absolutely have to.