RBL’s directors are looking to expand into a new suite of services. Although they are doing quite well in their existing lines of business, analysts have identified some new areas for development. One of these is expansion into manufacturing prefabricated homes. However, this venture requires a large amount of funding. To raise additional funds to finance this new project, the company is considering issuing a new bond. Required: Prepare a short report which supports the case for issuing a corporate bond. In your report: a.Explain what a corporate bond is, b.Outline the characteristics of the bond market, c. Explain the benefits of issuing bonds to raise financing.
RBL’s directors are looking to expand into a new suite of services. Although they are doing quite well in their existing lines of business, analysts have identified some new areas for development. One of these is expansion into manufacturing prefabricated homes. However, this venture requires a large amount of funding. To raise additional funds to finance this new project, the company is considering issuing a new bond. Required: Prepare a short report which supports the case for issuing a corporate bond. In your report: a.Explain what a corporate bond is, b.Outline the characteristics of the bond market, c. Explain the benefits of issuing bonds to raise financing.
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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RBL’s directors are looking to expand into a new suite of services. Although they are doing quite well in their existing lines of business, analysts have identified some new areas for development. One of these is expansion into manufacturing prefabricated homes. However, this venture requires a large amount of funding. To raise additional funds to finance this new project, the company is considering issuing a new bond.
Required: Prepare a short report which supports the case for issuing a corporate bond. In your report:
a.Explain what a corporate bond is,
b.Outline the characteristics of the bond market,
c. Explain the benefits of issuing bonds to raise financing.
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