Final answer:
Cash flows from financing activities can include issuing long-term debt, which allows firms to borrow capital and commit to scheduled payments. Other means of raising capital include investments from early-stage investors, reinvesting profits, or selling stock, each with unique advantages and disadvantages.
Step-by-step explanation:
In the context of the cash flows from financing activities, issuing long-term debt is one option that can be included. This refers to the firm's ability to raise financial capital by borrowing through banks or bonds, which entails acquiring funds that must eventually be repaid, often with interest. By choosing to issue long-term debt, firms commit to scheduled interest payments regardless of their income level.
Firms can also acquire financial capital through other means such as early-stage investors, reinvesting profits, or by selling stock. If a company sells stock, it is exchanging ownership shares in the company for financial capital, which then requires the firm to be accountable to shareholders and potentially dilutes control over the company. Each method of acquiring capital has various trade-offs, such as maintaining control or incurring debt obligations.