consider the differing means of debt financing available (or emerging) that may be involved in business...

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Finance

consider the differing means of debt financing available (oremerging) that may be involved in business performance anddecision-making (Ch. 26, 27, 30, 31).
What are the legal rights, responsibilities, and liabilities ofparties involved with negotiable instruments, secured transactions,and debtor-creditor relationships?
What steps should be taken to account for and safeguard acompanyâ€™s rights and track its responsibilities in suchrelationships?

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What Is Debt Financing When a company resorts to debt financing it means it gets the cash it needs from other businesses or sources incurring a debt to the original lender for either shortterm needs or longterm capital expenditures Debt financing is when the company gets a loan and promises to repay it over a set period of time with a set amount of interest The loan can come from a lender like a bank or from selling bonds to the public Debt financing may at times be more economical or easier than taking a bank loan Whether a loan or a bond the lender holds the right to the money being loaned and may demand it be paid in full with interest under the conditions specified by the borrowing agreement Company owners reap more benefits from debt financing than they do from issuing stock to investors Issuing stock results in a dilution of the owners ownership interest in a company Also the lender is entitled to only repayment of the agreedupon principal of a loan plus interest and can have no direct claim on future profits of the business the way an investor would Except on occasions where variablerate loans are used the principal and interest are known amounts and See Answer

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