Choices of Financing for a Business

Choices of Financing for a Business

• Long-term financing is necessary to fund expansions or major purchases for a business. There are two categories of long-term financing: Debt and Equity. Most businesses try to create a balance using both types of financing because each type has its own advantages and disadvantages. A finance manager or the CFO will research the options and determine which type of financing is appropriate for the business.

  Explore debt and equity financing and provide a detailed explanation of each using the bullet points below as a guide:

  • Define debt financing

  • Explain the advantages and disadvantages of debt financing for a business

  • Provide a detailed explanation of bonds as a form of debt financing. Then select and describe two other types of debt financing.

  • Define Equity Financing

  • Explain the advantages and disadvantages of equity financing for a business.

  • Provide a detailed explanation of stock as a form of equity financing. Then select and describe two other types of equity financing.

    Your paper should be 1-2 pages in length, and it should include a cover page in correct APA format with intext citations and references.