BUSINESS FINANCE II

RADHITYA ADHITAMA (125030200111016)

K-CLASS
LONG TERM FINANCING
Long-term financing is funding that has more for one year period. The form of long-term
debt were negotiated from a financial institution or through the sale of bonds . There are various
types of long-term sources of funds available for companies such as long-term debt, preferred
stock and common stock. Long-term debt can be obtained through a bank loan or by selling
bonds. Obligation and preferred stock is a type of financing with a fixed load or fixed income
securities.
Instrument that supports the long-term financing such as bank loans, bonds and unsecured
debt, and long-term debt that can be sold traded.
Long-term debt or long term loan is a form of agreement between the borrower to the lender
in which the lender is willing to lend a certain amount and the borrower is willing to pay preiodik
which includes interest and principal debt. This long term debt can be obtained through a bank,
insurance company, or can also to this long-term pension fund. Debt has three characteristic
namely: fast, flexible and low cost. It is because these loans are negotiated directly between the
borrower to the lender. Administrative costs to be relatively small and does not need the approval
of the Securities and Exchange Commission as well as if the company issuing the bond.
A. OBLIGATION
I. Definition of Obligation
Obligation is a debt certificate issued by a particular company and will be amount due on
a certain time and provide an income of a certain interest. Obligation maturities generally
between 10 to 30 years, but there are also bonds with maturities between 7 to 10 years. Bond is

actually the same as long-term debt obtained through a bank. Only this obligation sales published
and sold to investors directly. Bond interest rate is usually fixed and paid once in a year or twice
in one year.
B. STOCKS
One of the effects that the market is generally sold on the capital market (stock exchange).
Stock is a sign of ownership to a limited liability company .
The benefits derived from ownership of shares is as follows:
1. Dividend: part of the profits distributed to shareholders.
2. Capital gains: gains from a positive difference in the purchase price and the selling price
of the stock.
3. 3. Non-financial benefits, which have voting rights in the company's activities.
Shares emiten issuing with two types, namely common stock and preferred stock . The
difference in these shares is based on the rights attached to these shares. This right
includes the right to receive a dividend, a share are wealth if the company is liquidated
after deducting all the liabilities of the company.
In a stock there are three (3) kinds of values:
Face value is the value that is listed on the stock.
The effective value is the value that is listed on the stock exchange if the official
traded on an exchange, whereas
Intrinsic value is at the time traded stock value
1 Preferred Stock
As a source of long-term capital position between preferred stock held long-term debt to
common stock. As well as common stock, preferred stock is also part of the capital itself. As
with any long-term debt, preferred stock also provides a relatively constant income in addition to
the capital cost of the preferred stock tends to be higher than the cost of debt, because of the risks
faced by holders of preferred stock is greater than the risk of the bond holders, preferred stock
holders have preference or priority in payment of dividends. There are two types of preferred
stock is preferred stock are cumulative and not cumulative. Preferred stock are the cumulative

dividend payment and then obligations are always taken into account before paying dividends to
ordinary shareholders. So suppose in a given year the company is unable to pay dividends to
holders of preferred stock is cumulative, it means the company has a debt and must pay it next
year before distributing dividends to ordinary shareholders.
2 Common Stock
Share holders of ordinary shares are the actual owners of the company. Common stock is a
permanent source of funding, because it will be embedded in the company for an indefinite
period as long as the company is still run operations. Unlike a bond or preferred stock, common
stock holders will enjoy the deviden acquired company. The rights of holders of ordinary shares
are:
1 Voting rights in the general meeting of shareholders. With these rights, shareholders have the
right to choose the directors to control the company.
2 Have rights on the basis of dividend payments per share owned and determining dividend
payout ratio.
3 The right to purchase additional new shares issued by the company in proportion to his own
right to buy a particular stock before being sold to the public.
4 Right to assets after payment of more senior rights in liquidation. Thus receive until the end.

C. LEASING
Leasing is defined as a financing activities in the supply of capital goods or other
depreciable assets and does not always end up with ownership of the goods by the tenant
(suffrage / option) and the existence of periodic payments.
Source :
1 Petty, Scott, Keown and Martin, Basics of Financial Management, Prentice Hall Inc.,
Singapore, latest edition.
2 Brigham and Erhardt (2002) or newest edition, Financial Management; Theory and Practice,
Hartcourt Brace Inc., New Jersey
http://husnil91.wordpress.com/category/manajemen-keuangan-2/