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Long-Term Financing


Long-Term Financing
An established company is considering expanding its operations, and to achieve their business objectives, the company will require additional long-term capital financing. Long-term financing involves debt or equity instruments with greater than one-year maturities, and the cost of this long-term capital can be calculated using either the Capital Asset Pricing Model (CAPM) or Discounted Cash Flows (DCF) Model. This report will consider the costs and characteristics of various long-term debt and equity financial instruments, and discuss financial prudent debt/equity ratios. Various dividend and principal repayment policies will also be considered for corporate bonds.
Economist William Sharpe Won the Noble Prize in 1990 for his research on what devolved to be the CAPM theory on estimating the cost of capital for firms and evaluating the performance of managed portfolios. Sharpe “provided much of the basis for what is now termed the Capital Asset Pricing......


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Approximate Word Count: 1961
Approximate Pages: 8 (250 words per double-spaced page)

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