What are the advantages and disadvantages of debt and equity issuance?

Q: Why consider bonds?

A: A bond can be described as the security or asset which provides secure income to the investor…

Q: Explain the risks of holding debt and equity from the point of view of an investor.

A: Debt investments are generally fixed yielding instruments such as bonds, company deposits, etc.…

Q: What is off-balance-sheet financing? Why might a companybe interested in using off-balance-sheet…

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Q: What are the similarities and differences in equity valuation and bond valuation?

A: Bonds: Bonds are a debt instrument on which interest is paid. They can be issued at a discount/par…

Q: What are potential problems or limitations of using methods, to estimate the cost of debt, that rely…

A: Bond Ratings are the metrices used to determine the bond's quality and riskiness. It is the rating…

Q: what is the difference between bonds payable and accounts payable? explain your answer?

A: Bond payable and account payable both are liabilities of the company , which is to be paid in future…

Q: Debt also can be an advantage. How can be a debt can be advantage?

A: Debt Financing:   It is the money borrowed by the business from outside sources. This source of…

Q: Which of the following risk is affected largely by the debt-to-equity ratio? Liquidity risk…

A: The debt-to-equity (D/E) ratio reflects a firm's revenue obligations to its shareholder equity and…

Q: What is one of the primary concerns of financial analysis regarding a firm's debt payments?

A: A firm's debt payment ability is one of the main concerns for the suppliers of the business, to the…

Q: What is meant by the term “underlying” as it relates toderivative financial instruments?

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Q: What is equity security?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: How is preferred stock similar to long-term debt? How is it comparable to equity?

A: The Answer :

Q: What does the debt to equity ratio shows, and how is it calculated?

A: Debt to equity ratio and its implication:The ratio of company’s total debt to the total…

Q: What are the two types of debt financing?

A: Debt:   A debt is an obligation that requires on entity called the debtor to pay back a borrowed sum…

Q: Which of the following is the risk due to a firm's debt usage?      Business risk     Financial…

A: The investments that we make in debt, equity and other financial securities are exposed to different…

Q: What are some common challenges or complexities associated with bond amortization?

A: Bond amortization refers to the systematic allocation of the premium or discount on a bond over its…

Q: What are factors that affect the expected rate of return for holders of debt and equity?

A: The expected return is the return which the investors expect to receive in return from their…