Financial decisions of any type of organization can be divided into two categories. The first of these concerns spending: what spending decisions should be made to meet a particular organization's future objectives, which might be expressed in terms of profits, success in competition, new product development, growth, and so on. However, to realize these visions, each company must necessarily make decisions that fall into the second category, which concerns raising funds for its expenses. Expense financing represents an important issue in every company's existence as decisions within this category can have a wide variety of influences on each organization's present and future. A company's financing decisions can be further divided into two categories: financing from internal capital (capital raised from the company's profits) and financing from external capital obtained from external investors in a wide variety of ways. Since it is often not possible for companies to finance their activities exclusively with internal sources as these do not allow the transfer of financing over time, they often choose the external public for its greater flexibility in terms of obtaining financial resources at different times and for various purposes. . This essay will primarily focus on determining the factors that influence a company's decisions to raise funds to finance its further activities by obtaining external sources of capital. External capital can be obtained through the main ways of issuing securities: the first of these is debt financing. on the basis of obtaining loans, leases or issuing commercial paper, corporate bonds etc. This type of financing is tax deductible. The second is equity financing through common stock, preferred stock, or warrants. Equity financing is not tax deductible and is junior to debt financing: money can only be transferred to investors after debt payments have been made. Large shareholders have the ability to influence the company since they have the right to become members of the board of directors which oversees the company's decision making and often appoints senior executives. Therefore, unlike debt holders, equity holders can be seen as the formal owners of the company. Of course, both debt and equity financing instruments are not limited to those mentioned above: new instruments that fall into both categories are constantly being developed through mutual agreement between investors and companies. Furthermore, companies can decide the type of exchange with the securities they issue: this exchange can be private or public.