Explain the difference between a contingent liability and a liability. How do contingent liabilities affect a company’s statement of financial position and statement of income?
Answer to relevant QuestionsExplain why a financial statement user would want to review a company’s contractual commitment note. Identify and explain three typical ways in which bonds differ from loans. Spring Water Company Ltd. needed to raise $50 million of additional capital to finance the expansion of its bottled water facility. After consulting an investment banker, it decided to issue bonds. The bonds had a face value ...a. Describe the three main types of pension plans. b. As a manager, which type of plan would you recommend to the company’s senior executives? Explain. c. As an employee, which plan would you prefer? Explain. Why do bond investors like to see restrictive covenants included in bond indenture agreements? Give two examples of common bond covenants, and explain why each would be beneficial to bond investors.
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