Question

Why do you think a  corporation would offer bonds instead of stock?  What is the benefit and or cost?

Thanks!

Answer 1

When corporation provides an avenue to invest for market participants in terms of bonds than stock as it compels corporation to bond holders an assured payment each year in terms of coupon in case of non zero binds and bind holders are eligible to have asset control of corporation I'm case of insolvency of concerned corporation.

These benefits are missing for stocks as dividends mayor may not be paid by corporation and not entitled to any asset control.

Issuing share capital us very expensive process than that of introducing bond into capital market