List and Discuss Two Common Reasons Why Companies Invest in Debt

question 168

Essay

List and discuss two common reasons why companies invest in debt or equity securities.

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Definitions:

Series EE Bonds

Savings bonds issued by the U.S. government that pay interest until they reach maturity at 30 years.

Series E Bonds

Government bonds issued at a discount and meant for investors as a savings product, no longer available for purchase.

Maturity Date

The specified date on which the final payment of a loan or financial instrument is due to be paid in full.

Cash Method

An accounting method where revenues and expenses are recognized at the time cash is received or paid out.