Section 5
Long-Term Financing
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5 concepts
Financial Leverage
Financial leverage is a technique used to multiply gains and losses by obtaining funds through debt instead of equity.
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Debt Finance
Debt is a way for firms to access capital for operations or investment with various terms and agreements for future repayment .
Equity Finance
Companies can use equity financing to raise money and/or increase shareholder liquidity (through an IPO).
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Long-Term Loans
Three common examples of long term loans are government debt, mortgages, and debentures (bonds).
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Corporate Bonds
A corporate bond is issued by a corporation seeking to raise money in order to expand its business.