Why Do Companies Need Long-Term Financing

question 30

Essay

Why do companies need long-term financing?

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Definitions:

Liquidating Dividend

A dividend paid to shareholders from the capital base of the company, effectively reducing the company’s size and value.

Constant Rate

A fixed percentage or amount that does not change over time, often used in calculations of growth, decay, or interest.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with predetermined dividend payments.

Dividend Per Share

The amount of dividend that a company pays out for each share of its stock.