Compared to borrowing and buying an asset,leasingcan add value

a.to both sides (lessor and lessee) of the leasing transactiononlyif there is some sort of market imperfection

b.to the firm because it adds debt capacity with essentially 100% financing for the asset

c.to the firm because it annuitizes the cost of having the use of the asset and thereby offers lower transaction costs in the form of convenience (a consistent periodic payment)

d.to the firm because it adds debt capacity by allowing off-balance-sheet financing