Discuss, compare and contrast lease verses purchase options.
- What is debt financing? Provide at least two examples.
- What is equity financing? Provide at least two examples.
- Which alternative capital structure is more advantageous? Why?
Lease Verses Purchase Options:
A lease is an agreement whereby one party has the capability of acquiring a long term rental agreement while the other available party obtains some form of a long term debt which is secured. A lease is also understood as an agreement provided in writing under which an individual owning a property allows the tenant to make use of his or her property for a specified time period as well as specified rent. Purchase options on the other hand refers to a lease agreement whereby the lessee is provided with an option of purchasing an asset which has already been leased at a specific price which is usually carried out at the end of the leasing term (Chau, Firth& ...
This solution of 474 words discusses contract lease in comparison to purchase options. It also defines debt financing, equity financing and the characteristics of alternative capital structure. References used are included.