The reason for the debt offerings being more common and larger than equity offerings. Debt: Debt means the money, which is owed or is borrowed from a person. It is that kind of capital in which the interest and repayment of principal are fixed at pre-determined intervals. The issuer is obliged to pay the interest and principle amount at the specified rate and time. Equity: Equity represents the stock of the company with some ownership interest. It is also a kind of capital in which the issuer is not obliged for any capital investment, which is made by the shareholder but the shareholder is a part of the profit or loss of the company.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 20, Problem 1CQ

Summary Introduction

To explain: The reason for the debt offerings being more common and larger than equity offerings.

Debt:

Debt means the money, which is owed or is borrowed from a person. It is that kind of capital in which the interest and repayment of principal are fixed at pre-determined intervals. The issuer is obliged to pay the interest and principle amount at the specified rate and time.

Equity:

Equity represents the stock of the company with some ownership interest. It is also a kind of capital in which the issuer is not obliged for any capital investment, which is made by the shareholder but the shareholder is a part of the profit or loss of the company.

Expert Solution & Answer

Answer to Problem 1CQ

The debt offerings and equity offerings are both parts of the capital structure. However, the debt offering is more common and larger also. The reasons for this is as follows:

There are a lot of regulations under the Security Exchange Commission for the offering of equity. In comparison, the debt offering has very little regulations.
The debt offering can be done easily but equity is issued when the owner of a company wants to sell the proportion of his share to the public.
The equity offering takes a lot of time than the debt offerings. The company can take debt in less time compared to the equity.

Explanation of Solution

The debt offering means that a company offers total or portion of its shares to the debt holders to purchase the bonds at a rate and price, which is predetermined and specified for a given period of time.
The equity offering refers to the offering of the shares by a company in public. Those who purchase the equity are part of the profit and loss of the company and so they are called as shareholders.
Thus, there is the difference between the debt offering and the equity offering.

Conclusion

Thus, the debt offering is more common and larger than the equity offering.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Suppose that you are a U.S.-based importer of goods from the United Kingdom. You expect the value of the pound to increase against the U.S. dollar over the next 30 days. You will be making payment on a shipment of imported goods in 30 days and want to hedge your currency exposure. The U.S. risk-free rate is 5.5 percent, and the U.K. risk-free rate is 4.5 percent. These rates are expected to remain unchanged over the next month. The current spot rate is $1.90. 1.Move forward 10 days. The spot rate is $1.93. Interest rates are unchanged. Calculate the value of your forward position. Do not round intermediate calculations. Round your answer to 4 decimal places.

Don't solve. I mistakenly submitted blurr image please comment i will write values. please dont Solve with incorrect values otherwise unhelpful.

The image is blurr please comment i will write values. please dont Solve with incorrect values otherwise unhelpful.

Answer 2

Question

Chapter 20, Problem 1CQ

Summary Introduction

To explain: The reason for the debt offerings being more common and larger than equity offerings.

Debt:

Debt means the money, which is owed or is borrowed from a person. It is that kind of capital in which the interest and repayment of principal are fixed at pre-determined intervals. The issuer is obliged to pay the interest and principle amount at the specified rate and time.

Equity:

Equity represents the stock of the company with some ownership interest. It is also a kind of capital in which the issuer is not obliged for any capital investment, which is made by the shareholder but the shareholder is a part of the profit or loss of the company.

Expert Solution & Answer

Answer to Problem 1CQ

The debt offerings and equity offerings are both parts of the capital structure. However, the debt offering is more common and larger also. The reasons for this is as follows:

There are a lot of regulations under the Security Exchange Commission for the offering of equity. In comparison, the debt offering has very little regulations.
The debt offering can be done easily but equity is issued when the owner of a company wants to sell the proportion of his share to the public.
The equity offering takes a lot of time than the debt offerings. The company can take debt in less time compared to the equity.

Explanation of Solution

The debt offering means that a company offers total or portion of its shares to the debt holders to purchase the bonds at a rate and price, which is predetermined and specified for a given period of time.
The equity offering refers to the offering of the shares by a company in public. Those who purchase the equity are part of the profit and loss of the company and so they are called as shareholders.
Thus, there is the difference between the debt offering and the equity offering.

Conclusion

Thus, the debt offering is more common and larger than the equity offering.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 20, Problem 1CQ

Summary Introduction

To explain: The reason for the debt offerings being more common and larger than equity offerings.

Debt:

Debt means the money, which is owed or is borrowed from a person. It is that kind of capital in which the interest and repayment of principal are fixed at pre-determined intervals. The issuer is obliged to pay the interest and principle amount at the specified rate and time.

Equity:

Equity represents the stock of the company with some ownership interest. It is also a kind of capital in which the issuer is not obliged for any capital investment, which is made by the shareholder but the shareholder is a part of the profit or loss of the company.

Expert Solution & Answer

Answer to Problem 1CQ

The debt offerings and equity offerings are both parts of the capital structure. However, the debt offering is more common and larger also. The reasons for this is as follows:

There are a lot of regulations under the Security Exchange Commission for the offering of equity. In comparison, the debt offering has very little regulations.
The debt offering can be done easily but equity is issued when the owner of a company wants to sell the proportion of his share to the public.
The equity offering takes a lot of time than the debt offerings. The company can take debt in less time compared to the equity.

Explanation of Solution

The debt offering means that a company offers total or portion of its shares to the debt holders to purchase the bonds at a rate and price, which is predetermined and specified for a given period of time.
The equity offering refers to the offering of the shares by a company in public. Those who purchase the equity are part of the profit and loss of the company and so they are called as shareholders.
Thus, there is the difference between the debt offering and the equity offering.

Conclusion

Thus, the debt offering is more common and larger than the equity offering.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 20, Problem 1CQ

Summary Introduction

To explain: The reason for the debt offerings being more common and larger than equity offerings.

Debt:

Debt means the money, which is owed or is borrowed from a person. It is that kind of capital in which the interest and repayment of principal are fixed at pre-determined intervals. The issuer is obliged to pay the interest and principle amount at the specified rate and time.

Equity:

Equity represents the stock of the company with some ownership interest. It is also a kind of capital in which the issuer is not obliged for any capital investment, which is made by the shareholder but the shareholder is a part of the profit or loss of the company.

Expert Solution & Answer

Answer to Problem 1CQ

The debt offerings and equity offerings are both parts of the capital structure. However, the debt offering is more common and larger also. The reasons for this is as follows:

There are a lot of regulations under the Security Exchange Commission for the offering of equity. In comparison, the debt offering has very little regulations.
The debt offering can be done easily but equity is issued when the owner of a company wants to sell the proportion of his share to the public.
The equity offering takes a lot of time than the debt offerings. The company can take debt in less time compared to the equity.

Explanation of Solution

The debt offering means that a company offers total or portion of its shares to the debt holders to purchase the bonds at a rate and price, which is predetermined and specified for a given period of time.
The equity offering refers to the offering of the shares by a company in public. Those who purchase the equity are part of the profit and loss of the company and so they are called as shareholders.
Thus, there is the difference between the debt offering and the equity offering.

Conclusion

Thus, the debt offering is more common and larger than the equity offering.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 20, Problem 1CQ

Summary Introduction

To explain: The reason for the debt offerings being more common and larger than equity offerings.

Debt:

Debt means the money, which is owed or is borrowed from a person. It is that kind of capital in which the interest and repayment of principal are fixed at pre-determined intervals. The issuer is obliged to pay the interest and principle amount at the specified rate and time.

Equity:

Equity represents the stock of the company with some ownership interest. It is also a kind of capital in which the issuer is not obliged for any capital investment, which is made by the shareholder but the shareholder is a part of the profit or loss of the company.

Expert Solution & Answer

Answer to Problem 1CQ

The debt offerings and equity offerings are both parts of the capital structure. However, the debt offering is more common and larger also. The reasons for this is as follows:

There are a lot of regulations under the Security Exchange Commission for the offering of equity. In comparison, the debt offering has very little regulations.
The debt offering can be done easily but equity is issued when the owner of a company wants to sell the proportion of his share to the public.
The equity offering takes a lot of time than the debt offerings. The company can take debt in less time compared to the equity.

Explanation of Solution

The debt offering means that a company offers total or portion of its shares to the debt holders to purchase the bonds at a rate and price, which is predetermined and specified for a given period of time.
The equity offering refers to the offering of the shares by a company in public. Those who purchase the equity are part of the profit and loss of the company and so they are called as shareholders.
Thus, there is the difference between the debt offering and the equity offering.

Conclusion

Thus, the debt offering is more common and larger than the equity offering.

Answer 6

Chapter 20, Problem 1CQ

Summary Introduction

To explain: The reason for the debt offerings being more common and larger than equity offerings.

Debt:

Debt means the money, which is owed or is borrowed from a person. It is that kind of capital in which the interest and repayment of principal are fixed at pre-determined intervals. The issuer is obliged to pay the interest and principle amount at the specified rate and time.

Equity:

Equity represents the stock of the company with some ownership interest. It is also a kind of capital in which the issuer is not obliged for any capital investment, which is made by the shareholder but the shareholder is a part of the profit or loss of the company.

Expert Solution & Answer

Answer to Problem 1CQ

The debt offerings and equity offerings are both parts of the capital structure. However, the debt offering is more common and larger also. The reasons for this is as follows:

There are a lot of regulations under the Security Exchange Commission for the offering of equity. In comparison, the debt offering has very little regulations.
The debt offering can be done easily but equity is issued when the owner of a company wants to sell the proportion of his share to the public.
The equity offering takes a lot of time than the debt offerings. The company can take debt in less time compared to the equity.

Explanation of Solution

The debt offering means that a company offers total or portion of its shares to the debt holders to purchase the bonds at a rate and price, which is predetermined and specified for a given period of time.
The equity offering refers to the offering of the shares by a company in public. Those who purchase the equity are part of the profit and loss of the company and so they are called as shareholders.
Thus, there is the difference between the debt offering and the equity offering.

Conclusion

Thus, the debt offering is more common and larger than the equity offering.

Answer 7

Chapter 20, Problem 1CQ

Summary Introduction

To explain: The reason for the debt offerings being more common and larger than equity offerings.

Debt:

Debt means the money, which is owed or is borrowed from a person. It is that kind of capital in which the interest and repayment of principal are fixed at pre-determined intervals. The issuer is obliged to pay the interest and principle amount at the specified rate and time.

Equity:

Equity represents the stock of the company with some ownership interest. It is also a kind of capital in which the issuer is not obliged for any capital investment, which is made by the shareholder but the shareholder is a part of the profit or loss of the company.

Answer 8

Expert Solution & Answer

Answer to Problem 1CQ

The debt offerings and equity offerings are both parts of the capital structure. However, the debt offering is more common and larger also. The reasons for this is as follows:

There are a lot of regulations under the Security Exchange Commission for the offering of equity. In comparison, the debt offering has very little regulations.
The debt offering can be done easily but equity is issued when the owner of a company wants to sell the proportion of his share to the public.
The equity offering takes a lot of time than the debt offerings. The company can take debt in less time compared to the equity.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The debt offering means that a company offers total or portion of its shares to the debt holders to purchase the bonds at a rate and price, which is predetermined and specified for a given period of time.
The equity offering refers to the offering of the shares by a company in public. Those who purchase the equity are part of the profit and loss of the company and so they are called as shareholders.
Thus, there is the difference between the debt offering and the equity offering.

Answer 12

Conclusion

Thus, the debt offering is more common and larger than the equity offering.

Answer 13

Ch. 20 - Prob. 1CQ Ch. 20 - Debt versus Equity Flotation Costs Why arc the...Ch. 20 - Prob. 3CQ Ch. 20 - Prob. 4CQ Ch. 20 - Prob. 5CQ Ch. 20 - Prob. 6CQ Ch. 20 - Prob. 7CQ Ch. 20 - Prob. 8CQ Ch. 20 - Prob. 9CQ Ch. 20 - IPO Pricing The following material represents the...

Answer to Problem 1CQ

Explanation of Solution

Want to see more full solutions like this?

Chapter 20 Solutions