Business Finance - SOURC ES OF FUNDS AND CAPITAL STRUCTURE Research Paper

Business Finance - SOURC ES OF FUNDS AND upper-case letter STRUCTURE - Research Paper ExampleIn this type of lineageing, the hire purchaser or foreman receives the property or good instantaneously afterwards signing the purchase agreement. However, the ownership gets transferred fully after finishing the last instalment payment. Leasing The procedure of lease finance includes procurement of various pluss by essence of taking lease. Lease means one contract in which the ownership, the funding linked with the asset or the equipment and the risk taking are totally separated and shared by two or greater than two parties. In case of lease financing the lessor finances and the lessee accepts the risk, involved by utilization of the asset or equipment taken on lease, whereas a third party actually owns it. An separate alternative focusing is that the lessor would own as well as finance the asset or equipment, whereas the lessee would enjoy using it on with bearing certain amount of risk. This type of transaction includes commercial arrangement in which the equipment owner possesses the skilful to the asset or equipment user for utilising it in return of fixed rental. ache term sources of specie Long term sources of summit monetary resource mainly include those sources which are needed for longer span of time. These types of financing activities are mainly associated with fund expansion projects. These projects are complex in nature and need long sources for the funding activities. It is because of this reason that the organizations use long term sources for raising the funds. In many cases, the organizations do not make use of one single source of financing. The main long term sources of raising funds are Equity Shares The equity shares form an essential part while considering the ownership of any peculiar(prenominal) company (Walter 3). When any business decides to expand its operation, it issues high number of shares, in order to raise the fund neede d for effective implementation of the desired plan. This type of investment is an important source of raising the funds and it provides the investors with a certain portion of companys profit along with taking part in taking companys decisions (Hafer and Hein 15). This strategy of rising the funding by an organization out-performs all other strategies (Fontanills and Gentile 1 Rosen 8). When the earnings of a company are high, the stock prices increase resulting in high profitability for the company as well as the investors. If the company originates from growing market then raising of fund by issuing its equity shares turns out to be highly profitable. However, when at that place is economic downturn the shares of the companies remain at high risk in spite of their high brand value and salubrious management. Preference shares Issue of preference shares is another way of raising fund where the dividends are payable on the shares at the fixed rate and paid only in case of earning of profit by them. Thus, there remains no obligatory burden for the company (Methods of Raising Capital). But these shares do not possess voting rights. Debentures The companies have power of