A type of long-term financing used by both corporations and government entities is ________.

Question

Quizplus · Accepted Answer

Bonds are a type of long-term financing that can be used by both corporations and government entities. Bonds allow the issuer to borrow money from investors and promise to pay the investors back with interest at a later date. This is a form of debt financing, as the issuer is taking on a liability to repay the borrowed funds. Common stocks, preferred stocks, and retained earnings are all forms of equity financing, which are not considered long-term debt.

A Type of Long-Term Financing Used by Both Corporations and Government