Question

Задания к тексту: . Допишите предложения, используя информацию из текста.

1. A bond is …


2. Interest paid on bond is …


3.
Issuing too much stock …


 текст:



PRIMARY METHODS HOW TO RAISE NEW CAPITAL

ISSUING BONDS. A bond is a written promise to pay a
specific amount of money at a certain date in the future or periodically over
the course of a lo an, during which time interest is paid at a fixed rate on
specified dates. Should the holder of the bond wish to get back money before
the note is due, the bond may be sold to someone else. When the bond reaches
“maturity”, the company promises to pay back

the principal at its face value.

Bonds are desirable for the company because the
interest rate is lower than in most other types of

– borrowing. Also, interest paid on bonds is a tax
deductible business expense for the corporation. The disadvantage is tha t
interest payments ordinarily are made on bonds even when no profits are earned.
For this reason, a smaller corporation can seldom raise much capital by issuing
bonds.

SALES OF COMMON STOCK. Holders of bonds have lent
money to the company, but they have no voice in its affairs, nor do they share
in profits or losses. Quite the reverse is true for what are known as “equity”
investors who buy common stock. They own shares in the corporation and have
certain legal rights including, in most cases, the right to vote for the board
of directors who actually manage the

company. But they receive no dividends until interest
payments are made on outstanding bonds.

If a company’s financial health is good and its assets
sufficient, it can create capital by voting to iss

ue additional shares of common stock. For a large
company, an investment banker agrees to guarantee the purchase of a new stock
issue at a set price. If the market refuses to buy the issue at a minimum
price, the banker will take them and absorb the loss. Like printing paper
money, issuing too much stock diminishes the basic value of each share.

Answer 1

1. A bond is … a written promise to pay a
specific amount of money at a certain date in the future or periodically over
the course of a lo an, during which time interest is paid at a fixed rate on
specified dates.
2. Interest paid on bond is a tax
deductible business expense for the corporation. 
3. Issuing too much stock diminishes the basic value of each share.