acc_291_bonds___premium_or_discoun

May 29th, 2015
Studypool Tutor
Price: $10 USD

Tutor description

acc_291_bonds___premium_or_discoun

Word Count: 998
Showing Page: 1/4
ACC 291 Bonds - Premium or DiscountACC/291Bonds - Premium or DiscountBonds are a form of interest-bearing notes payable; obtaining large amounts of long-term capital (long term capital movements include FDI and movements of financial capital with maturity of more than one year, this includes equities) (Long term Capital, 2014). Upper management usually has to decide whether to issue common stock, equity financing or bonds (Accounting Coach, 2013). Issuing bonds is so they dont affect stockholder control. Do to the fact that bondholders do not have voting rights; business owners can raise capital with bonds and still maintain corporate control. Bonds are appealing to corporations because the cost of bond interest is tax-deductible. This tax break treatment may cause bonds to result in lower cost of capital than in equity financing. A possible disadvantage in using bonds is that the company must pay interest on a periodic basis; the business must also repay the principal at the due date. A business with fluctuating earnings and or a weak cash position may have great difficulty making interest payments when earnings are low. A business may also get long-te

Review from student

Studypool Student
" Goes above and beyond expectations ! "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1824 tutors are online

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