There are cases where company fall into financial crisis as ups and down are the formula of life. When concern faces such critical condition, need of money matters the management of that particular company pushing it to sell the part of the company or borrow money from bank. This occurs are not often, changes may be soon approaching ,so that particular company borrows money from the bank or sell the stock to compensate the down going trade.
Issuing Bond
If the company get the required amount from the bank that particular company is forced to pay money. This is known as issuing bond and it can be categorized under debt financing.In this type the concerned company has to pay in return for the borrowed amount from the bank.
Issuing Stock
The particular company in need of money issues the Initial Public Offering (IPO) and sell the stock and those who are in need of stock buys it and in this way the company sell its part of the company until the condition comes to normal . This is one way of escaping debt as there is no need to return the money . in other words it may be called as equity financing.
Issuing bond and issuing stock can be categorized under debt financing.
Issuing Bond
If the company get the required amount from the bank that particular company is forced to pay money. This is known as issuing bond and it can be categorized under debt financing.In this type the concerned company has to pay in return for the borrowed amount from the bank.
Issuing Stock
The particular company in need of money issues the Initial Public Offering (IPO) and sell the stock and those who are in need of stock buys it and in this way the company sell its part of the company until the condition comes to normal . This is one way of escaping debt as there is no need to return the money . in other words it may be called as equity financing.
Issuing bond and issuing stock can be categorized under debt financing.
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