OTHER SOURCES

OF CAPITAL
PREPARED BY : GROUP 3 BSTM 1B
 G R O U P 3

Bernardo, Trisha Coronel,

Lorreine M. Kateleene Mae P.

Cabelin, Julian A. Caballero, Kyla

Maris C.
 1 Long-Term Sources of Capital

2 Leasing

CONTENTS 3 Investment Banking

4 Financial Market
1 Long-Term Sources
of Capital
Long-term capital may be raised either through
borrowing or by the issuance of stock. Long-term
borrowing is done by selling bonds, which are
promissory notes that obligate the firm to pay
interest at specific times. Secured bondholders
have prior claim on the firm’s assets. If the
company goes out of business, the bondholders
are entitled to be paid the face value of their
holdings plus interest. Stockholders, on the other
hand, have no more than a residual claim on the
company; they are entitled to a share of the profits,
if there are any, but it is the prerogative of the
board of directors to decide whether a dividend will
be paid and how large it will be.
 SOME EXAMPLES OF LONG-TERM SOURCES OF
CAPITAL BONDS

EQUITY CAPITAL TERM LOANS

DEBENTURES

PREFERENCE RETAINED
CAPITAL EARNINGS
2 Leasing
Lease Financing is one of the important sources
of medium- and long-term financing where the
owner of an asset gives another person, the right
to use that asset against periodical payments. The
owner of the asset is known as lessor and the user
is called lessee.

The periodical payment made by the lessee to the

lessor is known as lease rental. Under lease
financing, lessee is given the right to use the asset
but the ownership lies with the lessor and at the
end of the lease contract, the asset is returned to
the lessor or an option is given to the lessee either
to purchase the asset or to renew the lease
agreement.
A lease is a contract outlining the terms under which
one party agrees to rent an asset—in this case,
property—owned by another party. It guarantees the
lessee, also known as the tenant, use of the property
and guarantees the lessor (the property owner or
landlord) regular payments for a specified period in
exchange. Both the lessee and the lessor face
consequences if they fail to uphold the terms of the
contract. A lease is a form of incorporeal right.
 Double-Net Leases: Gross Leases:

These leases make a Tenants pay rent while

tenant responsible for the landlord is
property taxes and responsible for other
insurance. costs.
Single-Net Laases: Triple-Net Leases:
Tenants who sign these
In this kind of lease, the
leases pay property
tenant is responsible for
taxes, insurance, and
paying property taxes.
maintenance costs.
 Investment
3 Banking
Investment Banking is a special
segment of banking operation that
helps individuals or organisations
raise capital and provide financial
consultancy services to them. They
act as intermediaries between
security issuers and investors and
help new firms to go public.
 TYPES OF INVESTMENT
BANKING SERVICES

ASSET
UNDERWRITING MANAGEMENT
SERVICES

SALES, TRADING
& CORPORATE
BROKING

MERGERS &
ACQUISITIONS RESEARCH
ADVISORS
4 Financial Market
Financial Markets include any place
or system that provides buyers and
sellers the means to trade financial
instruments, including bonds, equities,
the various international currencies,
and derivatives. Financial markets
facilitate the interaction between
those who need capital with those
who have capital to invest.
 COMMODITIES
STOCK MARKET
MARKET

TYPES OF
FINANCIAL
MARKETS

DERIVATIVES
BOND MARKET
MARKET
 THANK YOU！
F O R L I S T E N I N G