Question: Why is a bond considered to be a loan but a share of stock is not? Why do corporations issue both bonds and shares of

Why is a bond considered to be a loan but a share of stock is not? Why do corporations issue both bonds and shares of stock?

Step by Step Solution

★★★★★

3.55 Rating (155 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

A bond is a loan because the firm promises to pay back the pri... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

1347-B-A-A-M-E(324).docx

120 KBs Word File

Students Have Also Explored These Related Micro Economics Questions!

Q:

Why do corporations issue stock?

Q:

Why is EBIT generally considered to be independent of financial leverage? Why might EBIT actually be influenced by financial leverage at high debt levels?

Q:

Why is a bond premium or discount amortized as part of the adjustment process at the end of the year?

Q:

Why is a bond considered to be a loan but a share of stock is not? Why do corporations issue both bonds and shares of stock?

Q:

Why is a bond considered to be a loan but a share of stock is not? Why do corporations issue both bonds and shares of stock?

Q:

I need help on the 1065 partnership return. Its the one with Bilco Products. Thank you for whoever does. :) 2012 Edition Individuals', Corporation, Partnership, and Fiduciary Fact Patterns and Blank...

Q:

I need help with round 1 of CAPSIM COMP-Xm exam. Round 0 Inquirer Research & Development DRAFT SAVED AT Apr 11, 2020 10 CAM MOT Perceptual map ( end of this year) Decisions Name New Pfmn New Size...

Q:

I am unsure how to fill out the charts please help. The first 6 charts. Wherever there are green boxes is where numbers are inserted. The reat of the charts are there to help. Please let me know if...

Q:

This is a simulation. Please help me manage companies finances so that debt and profit is attained at the most accurate rate Research & Development CRAFT LAVED AT 16, MEN Decisions Name New Pfm...

Q:

The following questions are adapted from a variety of sources including questions developed by the AICPA Board of Examiners and those used in the Kaplan CPA Review Course to study long-term debt...

Q:

Do you think that virtual shopping will replace other forms of marketing research? Why or why not?

Q:

Briefly explain the Linton Yield as a method for determining the rate of return on the saving component of a cash-value policy.

Q:

Based on the company Procter and Gamble please fill out all the data and give me an introduction based on the data that you got.

Q:

Billabong Boomerangs, Inc., and Swahili Spears are direct competitors in the fast-growing seg ment of the hunters equipment market. Because of recent intense competition, both companies have...

Q:

An article in the New York Times discusses the consequences in financial markets of Brexit, the vote in a 2016 referendum in the United Kingdom to leave the European Union: Investors have dumped much...

Q:

Suppose that the U.S. firm Alcoa sells $2 million worth of aluminum to a British firm. Answer the following questions, assuming that the exchange rate is currently $1.50 = 1 and the British firm will...

Q:

Suppose that the U.S. firm Alcoa sells $2 million worth of aluminum to a British firm. Answer the following questions, assuming that the exchange rate is currently $1.50 = 1 and the British firm will...

Q:

help last person got it wrong Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects this risk class is 11 percent, and...

Q:

At the beginning of Yeor 2 . Ook Consulting had the following normal balences in its accounts: The following events opply to Oak Consulting for Year 2 . 1. Provided $67,100 of services on eccount. 2...

Q:

Exercise 26-13A Internal rate of return LO P4 Following is information on two alternative investments being considered by Tiger Co. The company requires a 4% return from its investments Project x1...