Pages and Pages Booksellers is seeking financing to fund the opening of two new locations in nearby college towns. There is no need to consider debt financing for this project. It will require a sizeable investment in equity funds.

Question

Quizplus · Accepted Answer

Although an expansion project is a sizeable investment that usually requires long-term financing, both debt financing and equity financing may be considered for this project. Long-term loans (debt financing) are repaid in a time period longer than one year and usually carry terms of anywhere from 2-10 years. Equity financing, funds from the sale of stock in the firm, does not need to be repaid.

Pages and Pages Booksellers Is Seeking Financing to Fund the Opening