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