Essay Axio: Stock and Home Depot

Submitted By trieath
Words: 620
Pages: 3

The intangible assets for both the company are brand differences. The Home Depot and Lowe’s are clear market leaders in the home improvement industry. They are both able to succeed, because they have solidified distinctly different images that appeal to different customer segments,
Another way of looking at this differentiation is by simply going to each company’s homepage. they are promoting exactly the same thing. Lowe’s is brighter color, may come off as a bit of a feminine touch. The Home Depot’s page uses bolder darker colors to convey their message, and the page is bordered with wood paneling, providing a more rugged aesthetic for customers.
As consumers, when we purchase a specific product, or shop at a certain store, we associate our image with that product/store and build brand loyalty. Hence the reason some men might shop at Home Depot, even though they don’t know the first thing about home improvement.
Why do companies issue bonds when they can issue stock? What are the advantages in issuing bonds? Aren't there any drawbacks of issuing bonds?

The most attractive feature of stock issuance is that the money generated from the sale of stock does not need to be repaid. There are, however, downsides to stock issuance that may make bonds the more attractive proposition because issuing stock means granting proportional ownership in the firm to investors in exchange for money.
Advantages
With bonds, companies that need to raise money can continue to issue new bonds as long as they can find investors willing to act as lenders. The issuance of new bonds has no effect on ownership of the company or how the company is operated. Stock issuance, on the other hand, puts additional stock shares in circulation, which means that future earnings must be shared among a larger pool of investors. This can result in a decrease in (EPS), putting less money in owners' pockets. Bond issuance enables corporations to attract a large number of lenders in an efficient manner.
Record keeping is simple, because all bondholders get the exact same deal with the same interest rate and maturity date. For companies, the bond market clearly offers many ways to borrow. From an investor’s perspective, the bond market offers a lot to consider. The variety of choices, ranging from bond types to…