ACC 210 Lecture Notes - Lecture 10: Capital Structure, Amortization Schedule

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Capital structure - the specific mixture of liabilities and stockholders" equity a business has chosen to raise capital to support business operations and expansion/growth. Debt financing - borrowing money from banks and/or bond investors. Equity financing - obtaining additional investment from stockholders. Usually issued to many lenders (unlike a loan received from an individual bank) Borrower repays the principal (known as the face value), on a specified maturity date - Pay interest over the life of the bond - typically interest payments are made every six typically 10 to 20 years later months (semi-annually) Secured bonds - bonds that have specific assets of the borrower that serve as collateral in. Term bonds - all of the bonds in a specific issuance mature at the same time. Serial bonds - these types of bonds mature serially (in installments) For example, issue 1000 bonds and all 1000 mature in ten years.

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