Final answer:
Financing decisions revolve around the methods companies use to obtain funds needed for long-term investments. These include investments from early-stage investors, reinvesting profits, loans, and selling stock, each with its specific implications related to control and repayment.
Step-by-step explanation:
Financing decisions primarily deal with how to obtain funds to acquire resources. Firms, when planning to fund long-term investments such as machinery, plants, or research and development projects, have various options to raise the necessary financial capital.
These options include getting investments from early-stage investors, reinvesting profits, borrowing from banks or through bonds, and selling stock. Each of these methods comes with considerations regarding control and financial obligations. For instance, borrowing enables a firm to maintain control over its operations without shareholder input, whereas selling stock dilutes ownership but doesn't require regular interest payments.