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Answer the Following Questions Regarding Stocks

question 97

Essay

Answer the following questions regarding stocks.
a.Why would a firm sell stocks instead of bonds?
b.What are some benefits,from the buyer's perspective,of stock ownership?


Definitions:

Fiduciary Duty

A duty to place a client’s interest above the professional’s own interests.

Debentures

A type of long-term security issued by a company, backed only by the general creditworthiness and reputation of the issuer.

Mortgage Bonds

Debt securities secured by a mortgage or collection of mortgages, giving holders a claim on the underlying property.

Directors' Meeting

A formal gathering of the board of directors of an organization to discuss and make decisions on company policy and management issues.

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