Long-Term Financing Alternatives

Dobre Elena ()
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Dobre Elena: “Ovidius” University of Constantza

Ovidius University Annals, Economic Sciences Series, 2010, vol. X, issue 1, 1556-1559

Abstract: Companies need capital to ensure the proper development of their activity. Most of the times, the long-term capital needs of a company outrun its possibilities to cover these needs through equity funds. Consequently, the need for longterm capital implies external long-term financing. Possibilities are many, but a company should choose to finance its assets in that way that would better benefit its future financial situation. The capital policy structure plays an important role in this latter sense, as the company should first establish whether its capital structure policy calls for equity, debt or a mix of these two. Long-term financing mainly refers to stock or bond issues or leases. The purpose of this article is to analyze the last two of these possibilities by making a short description of these financial instruments, together with a parallel between costs that each instrument would generate for the company.

Keywords: financing; long-term debt; leasing (search for similar items in EconPapers)
JEL-codes: D92 (search for similar items in EconPapers)
Date: 2010
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