The correct answer is A. leases.
A lease is a contract between a lessor (the owner of the asset) and a lessee (the user of the asset). The lessee agrees to pay the lessor a series of payments in exchange for the right to use the asset for a specified period of time. Leases are a type of financial security because they represent a claim on the assets of the lessor.
Preferred stocks are a type of equity security that gives the holder a priority claim on the company’s assets and earnings. Common stocks are a type of equity security that gives the holder a claim on the company’s assets and earnings, but does not have a priority claim over preferred stocks. Corporate stocks are a type of equity security that represents ownership in a corporation.
In conclusion, the type of financial security in which firms do not borrow money rather lease their assets is classified as leases.