Why would a company choose to issue bonds instead of issuing stock?

Q: A corporation recognizes a gain or loss O only when bonds are converted into common stock. when…

A: Redemption of Bond: When interest rates fall dramatically, bond issuers are forced to redeem their…

Q: What is a share? What is a bond? What is the difference between holding the share of a company…

A: Shares are the part of Equity of the company. Bonds are the part of liability for the company.

Q: Which of the following are differences between a bond and a common​ stock? ​(Select all that​…

A: Debt markets are markets where you contribute within the institutions or trade substances by the…

Q: What are the difference between debt and equity and explain how the bonds market operates.

A: Debt are instruments which are used to fund a company’s requirement. These instruments include bonds…

Q: If you own a company what you prefer to issue ordinary shares or bonds, explain why?

A: Shares of a company represent the ownership, and a shareholder is considered an owner of the company…

Q: Why does the Investors often are reluctant to convert bonds to stock, even when share prices have…

A: Investors often are reluctant to convert bonds to stock, even when share prices have risen…

Q: What is the difference between a Corporate Stock and a Corporate Bond?

A: Corporate Stocks are represents as equity portion of the issuing corporation. Owners of Corporate…

Q: What are the key differences between common stock, preferred stock, and corporate bonds?

A: All are different way for company to take investment via a public. All have different feature,…

Q: Which of the following events would make it more likely that a company would choose to call it’s…

A: Bond price implies for the consideration paid by an investor for acquiring bond. In provided case,…

Q: Define factors that affect bond ratings. Why are bond ratings important to firms and investors?

A: Introduction: Value of the bond depends on the following factors: Coupon rate Yield to maturity…

Q: Disadvantages of selling a combination of stocks and bonds?

A: Issued stock: The number of shares a public company has sold to the investors, stockholders,…

Q: Discuss and explain why a company may choose to raise capital by issuing bonds instead of issuing…

A: Capital is the source where the company raised money to run the business. There are two ways: Bonds…

Q: What are the advantages of holding stock in a company versus holding bonds issued by the same…

A: Stock is a security that represents the ownership of the fraction of a corporation. Bond is a debt…

Q: When market volatility increases, does that increase, decrease, or have no effect on the credit…

A: Market Volatility means deviation of market for a specific period.  The difference between the yield…

Q: Why the existence of rating agencies has lowered returns on corporate bonds?

A: Rating agencies are organizations the access the credit risk of organizations and rate them…

Q: What are the risks associated with stocks that may not be also in bonds?

A: The question is based on the concept of different types of risk associated with different financial…

Q: What are the advantages and disadvantages of investing in stocks vs bonds

A: Investing in stocks has the following risk: Unlike bonds, investment in common stocks does not…

Q: What are the pros and cons of a company’s decision to issue stock versus issuing bonds?

A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money…

Q: Discuss risks and returns characteristics of investing in ordinary shares and corporate bonds from…

A: A bond is a financial instrument that represents a loan made by an investor to a borrower (usually a…

Q: issurance of convertible bonds to be an attractive form of financing

A: Financing:- Financing means to provide money to someone for a particular rate of Interest. This is a…

Q: What is the advantage of issuing bonds instead of obtaining financing from the company’s owners?

A:

Q: Why might the company choose to make the bonds convertible into common stock?

A: Bonds:   A bond is a financial instrument for raising debt as it is called a debt instrument. It…

Q: Why do stock companies prefer equity financing in raising money for their operations than debt…

A: Equity financing refers to the process whereby a company raises the funds by issuing equity. The…

Q: What are convertible bonds

A: Bonds are financial instruments which provides fixed returns to its holders. Bonds actually, have a…

Q: Is stocks or bonds important to the company or just the investor?

A: The company issues ownership rights in the form of shares to the investors to raise the money from…

Q: Contrast the differences/similarities of common stocks and bonds. How are they used in the corporate…

A: Common Stock: This security represents the ownership of a company. Common stock is also known as a…

Q: what is the cost of debt after tax? what is the cost of PS what is the cost of common stock? what is…

A: Given information: In the given question, the number of shares, bonds and preference shares are…

Q: What are the different factors that affect the interest rates set by issuers of debt securities?

A: Debt securities seem to be financial assets which guarantee their holders interest payments in the…

Q: In what major ways do stocks differ from bonds? When would bonds be a better investment choice than…

A: Bonds are units of corporate debts issued by companies and securitized as tradable assets. Shares…

Q: Why would an individual invest in bonds rather than stock

A: A bond is a fixed income instrument that depicts a loan made by the issuer to the borrower. These…

Q: What is the Yield To Maturity of Corporation A’s bond issue?

A: YTM is also called as yield to maturity. It is the expected rate to be earned by investor, by…

Q: What is the difference between annuities and corporate bonds?

A: An annuity is a lump sum or a series of payments paid to someone on a periodic basis. In other…

Q: Explain the main difference between bond and common stock?

A: Debt markets are markets where you contribute within the institutions or trade substances by the…

Q: When are corporations likely to call their bonds?

A: They are many types of Bond, Generally the Bonds are Paid at the time of Maturity to the Bond holder…

Q: What are the differences between stock and bonds?

A: Stock is the share of ownership in the company. Bond is a debt instrument where the investor…

Q: Some companies issue shares at a premiumand others at discount. What are the factors influencing the…

A: Shares- A share is a piece of property that can be freely transferred unless the law or a contract…

Q: Stock warrants allow bond holders to exchange bonds for common equity shares. ​  True  False

A: Stock warrant: A stock warrant is basically the power to buy stock offers at a given cost. Warrants…

Q: Which of the following is a difference between stocks and bonds?  A. Bonds may be issued by…

A: Bonds are the debt and when entities issue bonds then, they are required to pay interest on it.

Q: To describe the pros and cons of investing in stocks than bonds?

A: Pros of investing in stock than bonds are. 1. Stock is highly lequid it can be converted into cash…

Q: advantages and disadvantages of selling a combination of stocks and bonds?

A: Introduction: Bond is nothing but debt securities issued by a company or government if they want to…

Q: What factors to be considered in choosing either bonds, preference shares or ordinary shares as the…

A: A company can raise capital by various means – by issuing bonds or by issuing preference shares or…

Q: Why do convertible bonds referred to as potential common shares?

A: Bond: It can be defined as the instrument that carries a fixed rate of income and represents the…

Q: How does preferred stock compare to long-term debt? In what respects is this comparable to equity?

A: The preferred stock and common stock are the financial instruments to raise money from the market.