Business Studies Predictions/Thoughts (1 Viewer)

sab13562

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why might a business choose to acquire funds through unsecured notes and debentures over mortgages?
Debenture is quite similar to unsecured, whereas mortgage, collateral is present, so if you cant repay theyll take the whole property away.
A debenture is a type of bond or other debt instrument that is unsecured by collateral, just like unsecured notes.
Since debentures have no collateral backing, they must rely on the creditworthiness and reputation of the issuer for support.
 

jimmysmith560

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why might a business choose to acquire funds through unsecured notes and debentures over mortgages?
First, let's understand the meaning of each term:
  • A mortgage is a loan that is secured by the property of the borrower. The property that is mortgaged cannot be sold or used as security for further borrowing until the mortgage is repaid. Mortgage loans are used to finance property purchases, such as new premises, a factory or an office. They are repaid with interest, usually through regular repayments, over an agreed period of time.
  • A debenture is a promise made by a company to repay money that has been lent to the business. An investor lends money to a company and in return, the company issues a debenture with a promise to make regular interest payments for a defined term and then repay the loan at a particular date in the future. Debentures carry a fixed interest rate.
  • An unsecured note is a loan from investors for a set period of time. Unsecured notes are not secured against the business’s assets and therefore present the most risk to the investors in the note (the lender). For this reason, it attracts a higher rate of interest than a secured note.
Looking at the definitions, we can infer the advantages of a business acquiring funds through unsecured notes and debentures over mortgages:

Unsecured notes vs mortgages:

As seen in the definition, unsecured notes present the most risk to the investors in the notes, i.e. the lender(s). Similarly, this means that they present a low level of risk to the business borrowing these funds. This is manifested in the fact that unsecured notes are not secured against the business's assets, as opposed to mortgages. This allows the business to ensure its assets are not used as collateral that is to be forfeited in the event of a default.

Debentures vs mortgages:

A potential advantage that debentures have over mortgages is the fact that they carry a fixed interest rates. Fixed interest rates allow for some form of financial security for the business, particularly considering a period of unfavourable economic fluctuations which, in the case of loans with variable interest rates, would not be favourable for a business. However, fixed interest rates remain unchanged, irrespective of the economic conditions.
 

aido6969swag

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hey so for the Section IV Essay, how do we go about incorporating our case studies?

Is it like English where we use our case studies as "quotes/evidence" to further our argument?

So if we followed PEEL we do Point, Explain, and then our case study as the Evidence afterwards to backup our explanation?
 

jimmysmith560

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Also, if anyone is seeking potential case study material, be sure to check out these resources containing recent and relevant case study material:

 

jimmysmith560

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hey so for the Section IV Essay, how do we go about incorporating our case studies?

Is it like English where we use our case studies as "quotes/evidence" to further our argument?

So if we followed PEEL we do Point, Explain, and then our case study as the Evidence afterwards to backup our explanation?
PEEL is a feasible structure for your Section IV response and allows you to effectively incorporate your case study material into your essay. You can start by introducing the point that you will be discussing. This will be followed by an explanation, which entails providing further details to elaborate on your point. Depending on the verb used in the question, you may need to effectively demonstrate relationship in the case of an "analyse" question, strengthen the theoretical aspect of your response in the case of an "explain" question or reach a particular discernment in the case of "assess/evaluate" questions. Once you have provided your explanation that is consistent with Business Studies content, you can then provide evidence explicating the manner in which real-life (or hypothetical) businesses apply the concepts that you have been taught as part of the Business Studies course which you have discussed in your explanation. An important consideration here is to ensure that you are able to link this information to your main point instead of just stating research. Once this is all done, all that is left to do is to conclude your paragraph by linking all of what you have covered to your thesis.

Lastly, ensure that you are including definitions to key terms within and throughout your response (where applicable). You may wish to consider the person reading your essay as an individual with limited knowledge of Business Studies. Definitions would allow for additional clarity and will reflect your understanding to the marker.
 

aido6969swag

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PEEL is a feasible structure for your Section IV response and allows you to effectively incorporate your case study material into your essay. You can start by introducing the point that you will be discussing. This will be followed by an explanation, which entails providing further details to elaborate on your point. Depending on the verb used in the question, you may need to effectively demonstrate relationship in the case of an "analyse" question, strengthen the theoretical aspect of your response in the case of an "explain" question or reach a particular discernment in the case of "assess/evaluate" questions. Once you have provided your explanation that is consistent with Business Studies content, you can then provide evidence explicating the manner in which real-life (or hypothetical) businesses apply the concepts that you have been taught as part of the Business Studies course which you have discussed in your explanation. An important consideration here is to ensure that you are able to link this information to your main point instead of just stating research. Once this is all done, all that is left to do is to conclude your paragraph by linking all of what you have covered to your thesis.

Lastly, ensure that you are including definitions to key terms within and throughout your response (where applicable). You may wish to consider the person reading your essay as an individual with limited knowledge of Business Studies. Definitions would allow for additional clarity and will reflect your understanding to the marker.
thanks bro, that's perfect!
 

jimmysmith560

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for case studies do we need to know a lot of specifics or just general info?
Perhaps you could establish some sort of balance regarding the extent of your knowledge of case studies:
  • You may need to reconsider the approach of retaining only general information in terms of a particular case study, as it may not be sufficient to enable you to support your point(s) directly and thoroughly.
  • Similarly, knowing too much specific information may be an inefficient approach as you may end up not needing to incorporate case study material in your response to the extent of thoroughness that you are technically anticipating by memorising too much specific information, i.e. it may not be necessary.
 

juliastiles

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do you actually need stats for the case studies other than the obvious areas like market share?
 

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