Bonds

Issuing and selling a corporate bond as a type of debt security will let the company raise capital. According to Ross et al. (2019), the prospectus allows a firm to finance its debt and, in return, provide pre-determined interest payments to investors. Upon its expiration, the business will stop making the payments, returning the original bondholders’ investments. Date of maturity, interest rate, call provisions, and par value are valuable features of a corporate bond (Levine, 2012). The support of the bond will involve the firm's ability to repay within a pre-established period, depending on the future revenues and profitability prospects.

Callable features, selling price, interest rate, and date of maturity are the key factors that the company will consider during its bond valuation. Levine (2012) postulated that business must take into account the maturity term to repay a bond loan and the possible adjustment to its interest rates. According to Ross et al. (2019), considering the selling price allows a firm to determine whether to provide a bond to investors at a premium, at a discount, or at par value and the possibility of redeeming it before the expiration date. From these descriptions the business will ensure it attains its capital requirements and...