Starting a Business

I) Line of Credit A) Similar to a loan B) Get them through times of low sales

II) Bonds A) Corporation borrows money by selling certificates B) Promises to pay back plus interest C) Low risk

III) Common Stock A) Share in partial ownership of a corporation B) Have greater potential for growth C) High risk

IV) Mergers A) Horizontal Mergers –1) Merger of Companies in the same industry –2) Regulated by the gov’t to prevent monopolies.

b) Vertical Merger 1) Merger of two companies at different stages of production 2) Regulated by the gov’t to insure competition

V) Conglomerates A) Merger between two unrelated companies. B) Not regulated because little effect on competition