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What is commercial paper?

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What is commercial paper?
  • 2 answers

Siddhant Singh Rathore 7 years, 10 months ago

Its is a short term unsecured promissory note easily Transferable with a maturity period of 15 days to 1 year and issued by large and credit worthy cooperates . Such cooperates Resort the CP to meet their working capital requirement of the company. They resort to commercial paper than a bank loan it is issued at discount and redeemable at PAR(Rs.100000 @ Rs 96000) example:- it can be issued for Bridge financing. If a company wants to raise capital by issuing long term sources like share,debenture etc. which involves huge floatation cost.The funds raised to commercial paper is used to meet floatation cost which is also known as Bridge financing.

Rahul Dhar 7 years, 10 months ago

It is the unsecured promissary note which is issued bh the company.
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