Business and Finance Homework
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Companies issue bonds to finance their operations. Often, companies need to raise money to support ongoing or future projects. So they sells bonds to bondholders as debts and repay them with coupons and principal payments in the future. I would buy a bond at a discount because the profit is the difference between the discount price and the par value, plus coupons. Some determining factors of whehter a bond is sold at a discount, face, or premium are company credit rating, duration and economic risks.