What term describes debt securities issued by a corporation to finance expansion and other activities?

What term describes debt securities issued by a corporation to finance expansion and other activities?

• A. Corporate Bonds
• B. Preferred Stock
• C. Collective Bargaining
• D. Negligence

Answer: (A)

Debt securities issued by a corporation to raise funds for expansion are corporate bonds. When a company wants to borrow money, it can issue bonds that promise periodic interest payments and the return of the principal at a set maturity date. Investors lend the company money by buying these bonds, making corporate bonds a common way to finance growth and large projects. This differs from preferred stock, which is equity and represents ownership with fixed dividends but no guaranteed repayment of principal or a set maturity. It’s also unrelated to collective bargaining, which involves labor negotiations, and to negligence, a legal concept describing carelessness leading to harm. Thus, the term that describes debt securities issued by a corporation to finance expansion is corporate bonds.

Debt securities issued by a corporation to raise funds for expansion are corporate bonds. When a company wants to borrow money, it can issue bonds that promise periodic interest payments and the return of the principal at a set maturity date. Investors lend the company money by buying these bonds, making corporate bonds a common way to finance growth and large projects.

This differs from preferred stock, which is equity and represents ownership with fixed dividends but no guaranteed repayment of principal or a set maturity. It’s also unrelated to collective bargaining, which involves labor negotiations, and to negligence, a legal concept describing carelessness leading to harm. Thus, the term that describes debt securities issued by a corporation to finance expansion is corporate bonds.