Asked by mackenzie newland on Jul 18, 2024
Verified
When a company sell bonds, it is ______________ money.
A) Borrowing
B) Lending
C) Investing
D) Reinvesting
E) Financing
Borrowing
The act of obtaining funds from another party with the agreement to repay, typically with interest.
Sell Bonds
The act of disposing of bonds in exchange for cash before they mature.
Company
An organization or entity engaged in commercial, industrial, or professional activities, either for-profit or nonprofit.
- Develop an understanding of the relationship linking the face value of bonds, their market valuation, and the dynamics of their maturity.
Verified Answer
MJ
Mariahbay JonesJul 22, 2024
Final Answer :
A
Explanation :
When a company sells bonds, it is essentially borrowing money from the investors who purchase the bonds. The company agrees to pay back the principal amount of the bond at a specified maturity date, along with interest payments at agreed intervals.
Learning Objectives
- Develop an understanding of the relationship linking the face value of bonds, their market valuation, and the dynamics of their maturity.