Corporate Bonds

Archive for the ‘Bond Types Compared’ Category

Question: Business Organizations?

i have some questions about economics.

Answer: 1.Why is a sole proprietorship the easiest type of business to establish?
LOWEST COST - YOU DON'T NEED TO SPEND MONEY ON INCORPORATING WHICH BASICALLY REQUIRES THAT YOUR COMPANY NAME IS UNIQUE IN THE REGION YOU ARE INCORPORATING. ALSO PAPERWORK HAS TO BE MORE ORDERLY, AND YOU HAVE TO PREPARE FINANCIAL STATEMENTS AT TEH END OF THE YEAR. BASICALLY MORE PAPREWORK AND MORE COST.

2.How does forming a partnership solve many of the problems that are associated with sole proprietorships?
YOU ARE ONLY SPREADING YOUR RISK WITH YOUR PARTNER; SOLE PROPRIETORSHIPS ARE RISKY SINCE YOUR RISK IS SPREAD INTO YOUR PERSONAL ASSETS.

3.Explain the structure and strengths of a corporation.
LIMITED RISK; ITS RESTRICTED TO THE ENTIRITY YOU CREATE/REGISTER; AS LONG AS YOU DON'T KEEP TOO MUCH FUNDS IN THE CORPORATION, EVEN IN CASE OF A LAWSUIT, YOU DON'T LOOSE MUCH.

4.Compare stocks and Corporate Bonds. How do corporations raise money through stocks and bonds?
IMAGINE BONDS AS BEING A LOAN; YOU HAVE TO PAY BACK TEH SUM AND INTEREST ON THE BOND AS PER THE TERMS WHEN TEH BOND WAS ISSUED. BOND HOLDERS HAVE LESSER RISK.

STOCKS - THE STOCKHOLDERS BEAR RISK IN THE COMPANY AND ARE ENTITLED TO DIVIDENDS WHENEVER THEY ARE ISSUED.

5.Explain why a corporation would choose to become a conglomerate.
CORPORATIONS CAN BECOME A CONGLOMORATE TO MINIMIZE RISKS FROM BUSINESS UNITS THAT ARE RISKY; THOSE UNITS CAN BE SPUN OFF AS INDIVIDUAL ENTITIES AND HELD IN A LOOSE AGGREGATION WITH THE PARENT COMPANY WITH THE COLLECTION BEING TERMED A CONGLOMORATE.

6.Explain the advantages of opening a franchise. Can you think of any disadvantages? List those too.
THE FRANCHISER HAS A PROVEN CONCEPT THAT WORKS AND YOU ARE SIMPLY USING HIS BUSINESS TEMPLATE; CUSTOMERS ARE PRETTY ASSURED (ASSUMINGTEH FRANCHER IS POPULAR).

DISADVANTAGE IS THAT YOU HAVE TO WORK WITHIN THE DOMAIN OF THE FRANCHISER; YOU CANNOT BECOME CREATIVE AND ALTER THE BRAND/PRODUCT THAT YOU ARE SELLING.

Stocks, Bonds & Investments : Types of Corporate Bonds

What are corporate bond offerings?

Corporate bond offerings are made when a corporate bond issuer issues particular Corporate Bonds as a form of debt financing for the first time. When a corporation needs to raise cash, it prints certificates and says they are worth an amount of money. These certificates can be Corporate Bonds or stocks. When the certificates are Corporate Bonds, they are called corporate bond offerings. The corporation then sells these Corporate Bonds to the brokers, dealers or the public.

A corporate bond offering is the process of offering the Corporate Bonds to consumers for the fist time. The process can also be referred to as Initial Public Offering.

After corporate bond offerings

Brokers will sell the Corporate Bonds offerings until they are sold out. If you buy the Corporate Bonds at their corporate bond offering price, later you will sell them on the secondary market at a market price which is most likely different from the initial corporate bond offerings.

Corporate Bond offerings by issuers

By issuing Corporate Bonds, companies create an important source of debt financing for plant construction, equipment purchases and working capital to expand their businesses.

Corporate Bonds typically fall into one of the following four industry groups:

• Finance bonds issued by banks, financial firms and insurance companies.
• Industrial bonds issued by major manufacturing, merchandising and service corporations.
• Utility bonds issued by electric, gas, water and telephone companies.
• Transportation bonds issued by railroads, airlines and trucking companies.