Core Difference Between Stocks and Bonds
Watch the video and answer the following question in page 1.
1.What is the core difference between stocks and bonds?
2.What is the key differentiator for Morningstar as an investment information service provider?
3.Should you totally rely on Morningstar or any other investment advice service or should you search out 4.several sources of advice? How can you know what advice is best?
I expect students to reference the concepts in the chapter19.
In page 2, answer the following financing growth discussion question.
You’ve owned a hardware company for the last five years. Even during the recession, you have been earning a net profit of 30% on your investment and have been able to pay yourself a reasonable salary. You are feeling so confident that you are considering expanding. You believe that your profit potential can improve greatly if you could expand your product line with newer high-tech equipment. You estimate that you will need $1 million for the expansion.
1.Explain the financing options in this situation.
2.Would you consider selling bonds if you had to pay 12% interest? Explain why or why not.
3. What financing option would you choose and why.
I also expect students to reference the concepts in the chapter19.
E-textbook:https://bookfortoday(dot)com/all/william-nickels-understanding-business-12th-edition/
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BUSINESS
1 What is the core difference between stocks and bonds?
One of the major difference between bonds and stocks is that bonds are in the form of a debt that the issuing institution promises to repay in the future. Additionally, bonds have conversion aspects that allow the bondholders to change the bonds into company stocks at particular predetermined rations of stocks. This decision is normally very important when the stocks of a company are increasing. As a result, bondholders can attain immediate capital gain. Further, bondholders are given a chance to vote and make decisions for the company regarding certain issues (William). On the other hand, sticks are shares in the ownership of a business or a company. A balance between bonds and stocks is achieved when business people ensure there is proper capital structure for the company.
2. What is the key differentiator for Morningstar as an investment information service provider?
One of the major differentiating aspects that plays a significant role in Morningstar is investment services that cannot be influenced by third parties. Additionally, it also provided support, education and financial investment tools for the institutional investors and financial investors among others.
3. Should you totally rely on Morningstar o...
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