Companies can increase the money with which they run their business in a number of ways. One way is borrowing money, and another way is buying things with the agreement that payment would be made later. There are also other processes for providing money for use by a company. Two of these processes are described here.
One process the company may use is to issue bonds(债券). Bonds are a special kind of promissory note. They are issued in different values, in the forms of money used in different countries, such as the pound in England or the euro in Europe. These bonds can easily be sold again to other people or to other companies. The company that issues the bonds promises to pay a particular amount of money as interest regularly for a certain period of time. This continues until when the company has to pay back the principal(本金) of the bond. Payments of principal and interest must be made on time whether the company has been earning money or not. If these payments are not made on time, it means that the company has not done what it agreed to do and can be sued(控告，起诉).
Another process companies may use is to issue other forms of promissory notes called stocks(股票). Bonds and stocks are opposite methods of providing money for a company. The people who buy stocks provide money that is earned and take part in deciding how the company will conduct its business. They must also take part in the losses. The people who own stocks receive dividends only after the company has paid all of its debts to the people who own bonds. On the other hand, the persons who own bonds have no right, according to the law, to help decide how the company will handle its business, unless it is bankrupt or in danger of becoming so.
1. Which of the following statement is not the way for companies to increase their capital?
A. Borrowing money. B. Buying materials without paying.
C. Issuing bonds D. Issuing stocks
2 As to bonds, we know from the passage that ________.
A. they are cheques like bank notes
B. the company only pays back the principal
C. they are issued in the forms of money
D. if a company is bankrupt, it needn’t pay back the interest
3. According to this passage, who have the legal control over the decisions of the business?
A. Stockholders B. Bondholders
C. The government D. The workers in the company
4. It can be inferred from this passage that ________.
A. to issue bonds is a better way than to issue stocks
B. stockholders can sue the company when it is bankrupt
C. bondholders have the same rights as stockholders
D. investing in stocks has more risk than in bonds
