The Three Basic Types of Long-Term Financing Are Debt, Equity

question 1

True/False

The three basic types of long-term financing are debt, equity, and hybrid financing.

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Definitions:

Warranty Payments

Payments made to repair or replace products that fail to meet specified standards of quality within a certain period after sale, covered under a warranty agreement.

Interest-Bearing Note

A debt instrument in which the issuer pays the investor interest on the principal amount, typically at a fixed rate, until maturity.

360-Day Year

A simplified accounting approach that assumes a year has 360 days, used to make interest calculations easier.

Interest Revenue

Income earned from the lending of funds or investment in interest-bearing assets, like loans, bonds, or savings accounts.