Bonds Represent a Permanent Source of Funding for Companies

question 280

True/False

Bonds represent a permanent source of funding for companies. The money firms acquire by issuing bonds does not need to be repaid.

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Definitions:

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories, and meeting other short-term liabilities.

Draft

A preliminary version of a document or plan that is subject to revisions and edits before the final version is completed.

Viola

A string instrument that is larger than a violin and produces a deeper sound, often used in orchestras and chamber music.

Cashier's Check

A check issued by a bank, drawn on its own funds rather than that of a personal account holder, guaranteeing the payee a secure form of payment.