Why might a corporation decide to issue bonds to build a new factory instead of issuing stock or borrowing mon

Answer 1

Corporate bonds are debt obligations issued by corporations as an alternative to issuing stock when raising capital. The corporation promises to repay the loan at a specified future date and makes semi-annual interest payments to the investor at a fixed rate. Because bonds are senior to stock, interest and principal are paid to bondholders before dividends are paid to stockholders.
http://www.schwab.com/public/schwab/investing/investment_products/bonds_treasuries/bond_funds/corporate_bonds.html?cmsid=P-708194&lvl1=investing&lvl2=investment_products&refid=P-701479&refpid=P-381847

"Corporate Bonds", are simple one mechanism available to selling off Corporate Debt. These 'Bonds' are sold and traded on the Open Market, just like any other stock, security, or bank instrument.

It is often very advantageous for a company to sell off their "Debt."

Some advantages are:

(1) Getting Rid of the Debt
(2) Raising Capital
(3) Better Market Exposure
(4) Freeing Up Assets to Pursue Other Things (Build new factories)
http://www.eagletraders.com/advice/corporate_bonds.htm

Answer 2

Issuing bonds is borrowing money.

Answer 3

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