Video Title: CVS Issues $40B of Debt for Aetna Acquisition discusses accounting for long-term liabilities including bonds
Question:
Video Title: CVS Issues $40B of Debt for Aetna Acquisition discusses accounting for long-term liabilities including bonds and long-term notes. Students learn the accounting behind corporate bonds as well as the considerations that corporations must consider when deciding whether to raise capital via debt financing versus equity financing. The video discusses a significant, recent bond offering by CVS, and connects some of the concepts in the text with a real-life example.
Questions for Discussion with Guided Answers
1. How is CVS raising $40 billion dollars according to the video? How would the obligations be reported in CVS’s financial statements?
2. Why would CVS decide to issue debt instead of issuing more common stock?
3. What concern does the video mention about the debt issuance and how does the analyst respond?
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III