Fundamentals of finance
The bonds are bought by the US market because they aid in ensuring the market has the
right funds that are needed for use in carrying out developments and the creation of the right
infrastructure.The projects that create job opportunities are started by the bonds acquired by the
United States government thus, it implies bonds are of great use in the emerging governmental
projects(Hillier et al, 2014).The bonds are of high use as they are well useful in maintaining of
quality life to the US citizens, their well-being and in turn leading to increase in the US
competitiveness with other markets.The US government issues bonds as they an approximation
of a theoretical risk-free currency that has to be maintained at the right standards. The cost of
infrastructure renovation is lowered by the purchase bond issued by the government,and this also
happens in case of new business.Bridges, transportation systems and roads are built by the use of
bonds that is collected by the US government. There are power plants that are used to heat the
homes of the citizens and are known to be constructed by the use of the bonds.The company that
has acquired the use of debenture and mortgage bonds, will have high bond rating in the side of
debentures. This is because debenture bond in a business are more risker than any other type of
bond and their maturities are short following that debenture bonds are not secured debts.First
mortgage bonds will be of high interest as it is secured despite it having long term returns on
FUNDAMENTALS OF FINANCE 2
investment(Hillier et al, 2014).I would prefer to use the mortgage bond because it is a secured
bond with long maturities and do away with unsecured debts like in the case of debentures,
which only benefit from shorter maturities,which do not last.
Rerences
Hillier, D., Clacher, I., Ross, S., Westerfield, R., Jordan, B., (2014). Fundamentals of Corporate
Finance.McGraw-Hill Higher Education; 2 edition
