Question

What is the difference between selling bonds of Goodwin Enterprises and issuing 10-year term bonds by Malone, Inc. to raise money for an expansion?

Answer 1

The difference between selling bonds of Goodwin Enterprises and issuing 10-year term bonds by Malone, Inc. to raise money for an expansion lies in the method of raising money, recipients of funds, and terms and conditions.

Step-by-step explanation:

The difference between selling bonds of Goodwin Enterprises and issuing 10-year term bonds by Malone, Inc. to raise money for an expansion is:

1. Method of raising money: Selling bonds involves offering financial instruments to investors in exchange for capital, while issuing 10-year term bonds refers to creating and selling bonds with a specific term to maturity.
2. Recipients of funds: When selling bonds, the funds go directly to the company selling the bonds (Goodwin Enterprises), whereas when issuing bonds, the funds are raised by Malone, Inc. for their expansion.
3. Terms and conditions: Each bond issuance may have different terms and conditions set, such as interest rates, repayment period, and other obligations.