chapter 19 - Hanifa Ayunisa Chapter 19 According to chapter...

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Hanifa Ayunisa January 18, 2011 Chapter 19 According to chapter 19, I have learned about advantages and disadvantages of issuing stock and bonds. Stocks are shares of ownership in a company. Today, stock is generally held electronically for the owners of the stock; the owners do not get any paper certificate. And when a person wants to issue stock, there are going to be some advantages and disadvantages. Some advantages to the firm of issuing stock are as owner of the business, stockholders never have to be repaid, there is no legal obligation to pay dividends to stockholders; therefore, income can be reinvested in the firm for future financing needs, and finally, selling stock can improve the condition of a firm’s balance sheet since issuing stock creates no debt. However, there are also some disadvantages of issuing stock, and there are: as owners, stockholders have the right to vote for the company’s board of directors. Typically, one vote is granted for each share of stock.
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