What is the capital order?

Own orders is the investment option that companies attach to investors to buy their debt. The debt company, usually in the form of bonds, will include a document or order that gives the investor the opportunity to purchase his own capital in the company later. In this way, on the basis of its own capital, it operates in the same way as the possibility of shares, and the difference is that it comes from the company itself rather than from investment brokers or other traders. If the investor uses this possibility to buy his own capital, he does not excuse the issuing company from debt obligations. Companies

that need funds to maintain operations or participate in a new business initiative have several options for them. One way to raise funds is to issue debt to investors. Investors will buy this debt, usually in the form of corporate bonds because they know they receive a return on their investment in the form of interest plateB.The these companies that want to harmonize an agreement for investors may also decide to include a stock order.

If investors buy a bond that contains a stock order, they have the right to buy shares from this company at a specific price in the future in the future, even if they are not obliged to do so. This option becomes valuable if the price of shares increases in the future. If this happens, an investor who has an order can buy shares at a lower predetermined price, sell shares for a higher current market price and pockets unlike. He or she could also hold shares and hope that it continues to increase value.

In most cases, its own capital with the date when this option becomes invalid. This date is generally years after the bond is purchased, which gives investors much more time than in typical stock options that usually expire in the background months. Investors could also decideSell ​​the possibility of a secondary market and in this way gain benefit.

It is important to realize that the capital order, even if it is performed, does not replace debt obligations based on the issuing company. The fact that the investor can earn and still receive interest on bonds and the return of his initial investment in bonds is what makes this order so valuable. This arrangement may also be beneficial for companies that can receive capital twice from investors if stocks are applied.