MGMT 20000 Chapter Notes - Chapter 9: Capital Structure, Jpmorgan Chase, Regional Policy Of The European Union

• School: Purdue University
• Department: Management
• Course: MGMT 20000
• Professor: Kimberly Fatten

Document Summary

Financing options available for a growing company include: capital structure. Mixture of liabilities and stockholders" equity a business uses. Learning objective 2 identify the characteristics of bonds. Bonds: a formal debt instrument that obligates the borrower to repay a state amount. Referred to as the principal or face amount, as a specified maturity date: usually issued to many lenders, borrower repays the principal or face amount, at a specified maturity date. Pay interest over the life of the bond: private placement. To keep costs down, the issuing company may choose to selling the debt securities directly to a single investor, such as a large investment fund or an insurance company. Secured bonds: supported by specific assets the issuer has pledged for collateral, mortgage bonds are backed by specific real estate assets. Unsecured bonds: most bonds are unsecured, also referred to as debentures, are not backed by a specific asset.