Between 2008 and 2010, Tim's Gyms wants to expand his business by building 20 new gyms around the country. Suppose that Tim promises to repay the lenders a specific amount on specific dates. This type of funding is
A) bonds issued in the bond market.
B) a mortgage obtained in the loan market.
C) mortgage- backed securities issued in the bond market.
D) stocks issued in the stock market.

Question

Quizplus · Accepted Answer

Issuing bonds in the bond market is a common way for companies to obtain long-term funding for expansion projects, as Tim's Gyms is planning to do. The company would promise to repay the lenders (bondholders) a specific amount over a set period of time, usually with interest. This type of funding is not a mortgage, mortgage-backed security, or stock issuance.

Between 2008 and 2010, Tim's Gyms Wants to Expand His