finance_0005

Financiation is one of the most important areas at the organization of companies.

In first place, we have banking financiation like loans and mortgages. With a loan, we borrow money form the bank with a interest rate that we have to give back in a place of time. A mortgage, is like a loan, that has assets as a security.

We also can issue stocks and shares from the share capital, that people can buy and sell in the “over the encounter” markets, the problem is that company has to pay dividens to investers every year. Also they can make a rights issue, that beneficts the old shareolders thant news. Another good way is the bonus issue because they dont need to pay dividens, and the make this profits, stocks from the company.

Companies can issue bonds or debts too. This financiation, is a way to divide the doubts of the company in diferent people who earn a coupon that change depending of the interest rates.

The advantages and disadvantages are that, for example, from banking financiation (loans and mortgages), the interest rate can change, or if they can’t pay the money, they can lose the assets. In the stock and share financiation, the problem is that when people buy their stocks, the share capital change of hands, and the first managers lose power of decision. Also, in “over the encounter” markets, prices of stocks can apreciate or depreciate and people will not buy them.

The bonds issue, is a good way of financiation, because the company divide their doubts into small financial products that people buy for a period acorded and company recive the money instants. People who bought them, can sell to other with out needing to wait till mature time. The price changes with the interest rates.

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