Suppose TouchTech, a hand-held computing firm, is selling bonds to raise money for a new lab-a practice known asequity finance. Buying a bond issued by TouchTech would give Andrewa claim to partial ownership in the firm. In the event that TouchTech runs into financial difficulty, the stockholders

Question

Computers and Technology

Zane

27 May, 04:05

Suppose TouchTech, a hand-held computing firm, is selling bonds to raise money for a new lab-a practice known asequity finance. Buying a bond issued by TouchTech would give Andrewa claim to partial ownership in the firm. In the event that TouchTech runs into financial difficulty, the stockholders

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Answers (1)

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Van Roberts · Answer 1

Answer: the stakeholders will not get paid (there is no obligation to repay the money acquired through equity finance by the company)

Explanation:

there is no obligation to repay the money acquired through equity finance by the company. Therefore when they run on a loss they both suffer the loss and the company does not have to pay back the stakeholders.