Задания к тексту: . Допишите предложения, используя информацию из текста. 1. A bond is … 2. Interest paid on bond is … 3. Issuing too much stock … текст: PRIMARY METHODS HOW TO RAISE NEW CAPITAL ISSUING BONDS. A bond is a written promise to pay a specific amount of money at a certain date in the future or periodically over the course of a lo an, during which time interest is paid at a fixed rate on specified dates. Should the holder of the bond wish to get back money before the note is due, the bond may be sold to someone else. When the bond reaches “maturity”, the company promises to pay back the principal at its face value. Bonds are desirable for the company because the interest rate is lower than in most other types of – borrowing. Also, interest paid on bonds is a tax deductible business expense for the corporation. The disadvantage is tha t interest payments ordinarily are made on bonds even when no profits are earned. For this reason, a smaller corporation can seldom raise much capital by issuing bonds. SALES OF COMMON STOCK. Holders of bonds have lent money to the company, but they have no voice in its affairs, nor do they share in profits or losses. Quite the reverse is true for what are known as “equity” investors who buy common stock. They own shares in the corporation and have certain legal rights including, in most cases, the right to vote for the board of directors who actually manage the company. But they receive no dividends until interest payments are made on outstanding bonds. If a company’s financial health is good and its assets sufficient, it can create capital by voting to iss ue additional shares of common stock. For a large company, an investment banker agrees to guarantee the purchase of a new stock issue at a set price. If the market refuses to buy the issue at a minimum price, the banker will take them and absorb the loss. Like printing paper money, issuing too much stock diminishes the basic value of each share.
1. A bond is … a written promise to pay a specific amount of money at a certain date in the future or periodically over the course of a lo an, during which time interest is paid at a fixed rate on specified dates. 2. Interest paid on bond is a tax deductible business expense for the corporation. 3. Issuing too much stock diminishes the basic value of each share.
