Why a company might choose to issue a bond instead of stock

Assignment Help Financial Management
Reference no: EM132323056

Question

Often times when large amount of funds are needed for a project or expansion, companies and governments seek financing to help pursue these projects.

Define what a bond is and discuss the advantages and disadvantages of bond financing, such as those covered in your chapter.

Consider discussing why a company might choose to issue a bond instead of stock, a form of equity financing. Be sure to cite any sources used, including the textbook.

Reference no: EM132323056

Questions Cloud

C-based pseudo code : Consider the following C-based pseudo code:
How much interest does the company pay to its bondholders : Record the issuance for bond at 99. How much interest does the company pay (in cash) to its bondholders every six months if the bonds are sold at par?
What are some emerging technology trends : What are some emerging technology trends that have influenced your personal choice of an SDLC, either in your experience
Describe the characteristics of your ideal computer : What would you use it for? Would you choose a handheld, portable, desktop or workstation computer? Why?
Why a company might choose to issue a bond instead of stock : Often times when large amount of funds are needed for a project or expansion, companies and governments seek financing to help pursue these projects.
Preparea lease schedule for the three years of the lease : The implicit interest rate in the lease is 10% p.a. Ownership of the computer system will transfer to the company at the end of the lease term.
Computers and databases changing the dba role : Why and how are new technological advances in computers and databases changing the DBA's role?
Discuss some hardening techniques : Discuss some hardening techniques or products you have used for Workstations.
What is the combined number of units of the two products : Based on this information, what is the combined number of units of the two products that would be required to break-even with the projected sales mix ?

Reviews

Write a Review

Financial Management Questions & Answers

  Eps grow in an expansion with and without the debt issue

What is EPS under each economic condition with and without the debt issue? How much does EPS grow in an expansion with and without the debt issue?

  How much is the asset present value reduced

If you decide that the risk of the assets requires a discount rate of 11%, how much is the asset’s present value reduced ?

  What is the cost of capital for adventure outfitter

What is the cost of capital for Adventure Outfitter if the corporation raises money by selling common stock?

  The evaluation of the metrics discussed

Projects are not limited in size, should be professional in appearance, and cover (at a minimum) the evaluation of the metrics discussed in Gapenski & Pink.

  The firms financial break even point

A corporation has $5,000,000 of 8% bonds and $3,000,000 of 10% preferred stock outstanding. The firm's financial break even (assuming a 40% tax rate) is?

  Causes for lack of trading of sukuk in secondary market

Many have outlined the importance of sukuk to be traded in the secondary market. What are the causes for the lack of trading of sukuk in the secondary market?

  Prepayment penalty based on loan balance

If the bank charges her a 1 percent prepayment penalty based on the loan balance, how much must she pay the bank on November 1, 2015?

  What will its current price per share be

If it expects to keep the same payout ratio, and to earn 20% on future investments forever, what will its current price per share be? Assume that the cost of capital is 15%.

  Compute the effective interest rate per period

compute the effective interest rate per period and calculate the total amount of fees that it charges.

  What should the yen rate be for interest parity theory

what should the yen rate be for IPT (interest parity theory) to be attained? If the yen rate were 6%,

  What is enterprise value of flexics at current market prices

Look at the following Balance Sheet and financial information for Flexics Inc. Flexics, Inc., is a leading producer of plasma technology display devices in the USA. What is the total number of shares in Flexics currently? Based on the Balance Sheet v..

  Why is beta theoretically correct measure of a stock risk

Why is beta the theoretically correct measure of a stock’s risk?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd