Business Finance
XACC291 Week 2 discussion question

Question Description

Need help with my Business question - I’m studying for my class.

For a little more of a spark consider the following after reading Chapter 10 of our text:  

Why do companies issue bonds? Would you rather buy a bond at a discount or a premium rate? Why?.

Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final Answer

Companies issue bonds to raise capital.  There are many motivations to raise capital, but here are a few: desire to acquire another company, desire to purchase some new property/plant/equipment, desire to perform some research and development, desire to recapitalize the business to pay the owners a dividend, etc....

I would rather buy a bond at a discount because that means I'd be buying it for less than face value (thus, when it expired I'd receive more money back than I paid of the bond in the first place).

Alex Z (997)
University of Maryland

Top quality work from this tutor! I’ll be back!

Just what I needed… fantastic!

Use Studypool every time I am stuck with an assignment I need guidance.


Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors