Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Give some examples of debt financing?
Expert Solution
Step 1
Following are some examples of debt financing:
- Whereas, Debentures are a corporate or government obligation, not safeguarded by an asset. Bonds are a wide range of debentures however not all bonds are debentures. Secured bonds fall into their own class and can be characterized by the insurance connected to the bond.
Step 2
- Term loan: A term loan is an advance from a bank that has a set reimbursement period and either a fixed or floating interest rate for a given sum. For a current private venture with sound fiscal reports, a term loan is consistently satisfactory.
Step 3
- Bank guarantee: A bank guarantee is a type of financial backstop which a loaning organization gives. The bank ensures guarantees the moneylender will ensure an account holder's commitments are met. At the end of the day, if the indebted person doesn't pay a credit, it will be remunerated by the Bank. A bank ensure helps the borrower, or account holder, to purchase items, buy hardware or draw down a credit.
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