Question

What are three forms of corporate securities discussed in the chapter?

Short answer

Three forms of corporate securities are corporate bonds, common, and preferred stock.

Step-by-step solution

Corporate securities

Corporate securities are commercial legal papers that facilitate a corporation to gather funds from investors and lenders for smooth functioning of its business operations.

Forms of corporate securities

Corporate securities are classified into three categories:

• Corporate bonds: Corporate bonds are debts that a company issues to raise capitalfrom lenders.
• Common stock: Common stock represents equity rightsof investors in the company’s assets and associated obligations.
• Preferred stock: Preferred stocks are stocks that enjoy the benefits of some preferential rights than common stockholders.