Can a company list its debentures even without listing its equity shares?
Question:
Can a company list its debentures even without listing its equity shares?
How Companies Raise Money:
When a company is looking to raise external funds for its operations, there are a few options open to it. A company can approach a bank for a loan, just as an individual would. Bank loans often come with high-interest rates and contractual obligations, and so companies often seek out alternatives for raising capital. Companies can enter into debt obligations with individuals as opposed to banks. They do this by selling bonds. With a bond, an investor lends money to a company for a specified length of time. In turn, the company will, depending on the terms of the bond, pay the investor periodic interest payments and will repay the full amount of the loan upon maturity. Alternatively, companies can raise new funds by selling stocks/shares to investors. In doing this, a company is selling a share of ownership (equity) in the company.
Answer and Explanation: 1
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View this answerA company is able to dictate how it raises external funds. A company can sell bonds without having to sell shares. There are obligations and...
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Chapter 24 / Lesson 2Understand what debt capital is. Learn debt capital and equity capital definitions and characteristics. See debt and equity capital examples.
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