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Screen Shot 2019-03-10 at 3.26.55 PM.png - Commercial paper...

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Unformatted text preview: Commercial paper is an alternative to short - term bank borrowing for a corporation because it gives They another way of borrowing or acquiring funds needed in the immediate future . Able to issue commercial paper , the rate is often below the rate that banks require . More details are* Given below . Commercial paper is a short - term unsecured promissory note that is issued in the open market and That the obligation of the issuing corporation . The primary purpose of commercial paper Was to provide short - term funds for seasonal and working capital needs . Now use commercial paper for other purposes such as bridge financing . For example , suppose that a corporation needs long-term funds to build a plant or acquire equipment . Rather than raising* Long-term Funds Immediately , The Corporation May Elect To Postpone The Offering Until More* Favorable capital Market conditions Prevail . The Funds raised by issuing Commercial paper are* Used until longer - term securities are sold ....
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  • Spring '19
  • didid
  • Finance, Promissory note, term bank borrowing

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