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> the effect of flat revenue on both their ability to make bond interest payments If your revenue is flat you had no business selling a bond. The purpose of a
by erikpukinskis 9y ago
> the effect of flat revenue on both their ability to make bond interest payments
If your revenue is flat you had no business selling a bond.
The purpose of a bond is to buy a jump in regular revenue. If the jump doesn’t happen you default on your bond. Or you sell assets and eat the cost and try again with a better plan.
- marcell 9y agoThis isn’t really true. You take out a bond because you think you can make more ROI than the interest rate. Utilities in particular take out bonds to build power plants and hope to generate more profit than the cost of interest. The operate on long time scales (10 years or more) and depend on predictable demand to make their model work.