Final answer:
The statement is False. Long-term financing often has lower annual interest rates than short-term financing, providing stability for long-term financial planning. Companies have numerous financial capital options including bank loans, issuing bonds, or selling stock, each with different implications for control and obligations.
Step-by-step explanation:
The statement 'Long-term financing is usually less expensive than short-term financing because it is not as advantageous to the corporation as short-term financing.' is False. Long-term financing is typically associated with lower annual interest rates but larger overall interest costs over the life of the loan, offering more stability for company planning and budgeting. Short-term financing, on the other hand, may have higher annual interest rates, reflecting the higher risk associated with the shorter time frame and the generally smaller amounts borrowed, which make it more advantageous for meeting immediate financing needs.
Companies access financial capital through various methods such as borrowing from banks, issuing bonds, or selling stock. While bank borrowing is often more customized and can be advantageous for smaller firms, issuing bonds can raise significant capital for larger investments and is typically used by larger, well-known firms. Issuing stock involves selling company ownership and appealing to a board of directors and shareholders, diluting the control of the existing owners.