When a firm wants to borrow directly from the public to finance the purchase of new equipment, it does so by selling bonds.

Question

Quizplus · Accepted Answer

Selling bonds is a common way for firms to raise funds directly from the public for purposes such as purchasing new equipment, expanding operations, or refinancing existing debts. Bonds are essentially loans from the bond purchasers to the issuer, with agreed-upon terms for interest payments and principal repayment.

When a Firm Wants to Borrow Directly from the Public