Corporations can raise large amounts of financial capital by selling formal IOUs called _____.

Question

Quizplus · Accepted Answer

Corporations can raise large amounts of financial capital by selling formal IOUs called corporate bonds. Government bonds are issued by the government to raise funds, while stocks represent ownership in the company rather than debt. Preferred stocks are a type of stock that pays a fixed dividend and has priority over common stock in the event of bankruptcy, but it still represents ownership in the company rather than debt.

Corporations Can Raise Large Amounts of Financial Capital by Selling