Question

Explain why corporations invest in stocks and debt securities.

Answer 1

Corporations invest in stock and debt securities there is 2 main reasons.

one reasons is financial gain. once client payment drops and business revenues decrease, corporations can invest in securities like bond and preference shares to own a gentle stream of financial gain. the opposite reason companies value more highly to invest available is for diversification. rather than an organization having all its cash engaged in one variety of business, companies will defend themselves by having ties to alternative styles of businesses . once companies invest in stocks, bonds, and debt securities they report them on money statements like the record. once an organization plans on holding on to those investments for quite one year they're according as long-run investments. once an organization plans on mercantilism things during a short-period of your time (less than a year), the things square measure according as short investments.