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In a paragraph describe how does a company utilize stocks and bonds in financing growth? Identify...

In a paragraph describe how does a company utilize stocks and bonds in financing growth? Identify the major sources of external financing for companies.

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Answer #1

company can be utilising the bonds and stocks in financial growth by raising capital through issue of bonds in financial market and issue of stock in stock market for first timers.

company can also purchase the stock in the stock market in order to provide a signal to the market that company feels that the shares are undervalued.

Company can also distribute dividend in order to provide a glimpse that companies having higher profitability in order to increase the share price.

Major sources of external financing for the companies would be related to to debt financing and equity financing in form of stocks as well as money market instruments which could be related to certificate of deposits and commercial papers.

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