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1.A corporation has decided to issue bonds. At the time of the determination and “printing”, but...

1.A corporation has decided to issue bonds. At the time of the determination and “printing”, but before offering, the market rate is 5.5% for comparable bonds. At offering the market rate is 4.85%. Is the issued at a discount or premium? And, how does this effect the corporation?

2. Why would a corporation decide to issue bonds instead of stocks? Describe the at least two advantages and how it affects the corporation.

3.Expanding into a new product line, into a new geographical area such as a new country, or increasing production beyond its current capacity a corporation may need to increase its capital to pay for the expenditures. To achieve this goal, a company has the ability to offer bonds or stocks. Pretend you are the CFO of the corporation that need to raise capital. Pick an offering and explain why you picked that alternative over the other option.

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ekkarill92 answered 2 years ago
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