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To raise money for some necessary purpose without selling off part of the company.
Example: The XYZ corporation, manufacturer of cow milking machine accessories, has a factory in New York State. Its products have become popular in California. They have found shipping this stuff across the country kills the profit margins, so they've decided to open a second factory in California.
XYZ could finance its new factory in three ways.
It could go to the bank and get a conventional business loan. Or, more precisely, it could TRY to get one; this factory is going to cost $500,000 and most banks don't want to write a loan that large.
It could sell some of the company to investors by issuing stock. This would turn XYZ over to the whims of Wall Street, and they might not want to do this.
Or it could create bonds. The people who buy them are loaning money to XYZ. The bond buyers will receive periodic interest payments (note: there are some really esoteric bonds that don't pay interest, but we won't talk about those now) and at the maturity of the bond will receive the price they paid for the bond.
What else can I help you with?
What companies have to issue bonds that are collateralized?
Companies with low credit standing often issue secured bonds, for which specified assets have been pledged as collateral.
Can private companies issue bonds for financing purposes?
Yes, private companies can issue bonds as a way to raise funds for financing their operations or projects.
Why does government issue only bonds while companies issue both stocks and bonds?
Because stock is ownership, and "the people" own the government.
What are companies with outstanding bond issue in the market?
Companies with outstanding bond issue in the market are companies that have used tax payers' moneys in the form of bonds but have not paid back the bond. Bonds are usually used for projects that benefit society as a whole, such as new schools.
Why does the government issue only bonds company's issue both stocks and bonds?
The government primarily issues bonds to raise funds for public projects and manage national debt, providing a secure investment option for individuals and institutions. In contrast, companies issue both stocks and bonds to finance operations and growth; stocks offer ownership and potential dividends, while bonds provide fixed interest payments with less risk for investors. This dual approach allows companies to attract a broader range of investors and balance their capital structure.
What companies have to issue bonds that are collateralized?
Companies with low credit standing often issue secured bonds, for which specified assets have been pledged as collateral.
Can private companies issue bonds for financing purposes?
Yes, private companies can issue bonds as a way to raise funds for financing their operations or projects.
Why does government issue only bonds while companies issue both stocks and bonds?
Because stock is ownership, and "the people" own the government.
What are companies with outstanding bond issue in the market?
Companies with outstanding bond issue in the market are companies that have used tax payers' moneys in the form of bonds but have not paid back the bond. Bonds are usually used for projects that benefit society as a whole, such as new schools.
Can a private company issue bonds?
Yes, a private company can issue bonds to raise capital. These bonds are typically referred to as private placements and are offered to a select group of investors. Private companies may choose to issue bonds as a way to diversify their sources of funding and potentially lower borrowing costs.
Do corporations issue stocks and bonds?
They do in fact issue stocks and bonds.
What is generally the reason for a company to issue bonds?
Companies issue bonds as a way to raise capital for financing projects or operations. By issuing bonds, companies can borrow money from investors at a fixed interest rate for a specified period, providing a source of funding that is different from taking out a loan from a bank. Additionally, issuing bonds can help diversify a company's sources of funding and leverage its creditworthiness to potentially access lower borrowing costs.
Describe the differences that exist in current accounting for original proceeds of the issuance of convertible bonds and of debt instruments with separate warrants to purchase common stock?
Companies need to finance their business plans. In order to finance them, the company can either go for debt or issue shares or issue bonds to get the required investment. Debt can be in the form of bonds.
How can you become bonded if you have a criminal record in Missouri?
There is no way to answer this question. "Bonds" are issued by private insurance companies who make their own evaluation aad determination as to who they will issue one or not.
What type of bonds do the United states government give issue?
municipal bonds?
Why are stocks and bonds sold?
The stocks and bonds are sold by the companies are due appreciation of capital funds to meet the additional requirments of companies.
Can you become bonded if you have a criminal record in Maryland?
The answer to this question cannot be known. Bonds are issued by private insurance companies that issue the bonds. They are private businesses and can refuse bonding to anyone they don't consider 'fit' to be insured based on their own internal criteria.
