Technology and Criminal Justice a New Reality law homework help
April 5, 2021
read the following excerpt from the moca exhibit written to introduce the concept of jing luo
April 5, 2021
Show all

compare the different characteristics of debt bond and equity

Try to make it five paragraphs

Types and Common Features of Bonds

A bond is a type of debt or long-term promissory note, issued by a borrower, promising to its holder a predetermined amount of interest per period and repayment of principal at maturity. The issuers or borrowers of bonds could be federal and state governments or local municipalities, as well as corporations.

A. Types of Bonds

  • Secured bonds: bonds secured by collaterals, such as a building, so that if firm defaults, bondholders are entitled to the value of the collaterals.
  • Mortgage bonds: bonds secured by a lien on specific assets of the firm, such as real estate. Typically, the value of the real property is greater than that of the mortgage bonds issued. This provides the bondholders with a margin of safety in the event that market value of secured property declines.
  • Debentures: unsecured long-term debt. They are viewed as being more risky than secured bonds and as a result must provide investors higher yield than secured bonds.
  • Subordinated debentures: bonds that have a lower priority of claim on assets in the event of liquidation than do other senior debt holders. They are honored after the claims of secured debt and un-subordinated debentures have been satisfied.
  • Zero and low coupon bonds: Allow the issuing firm to issue bonds at a substantial discount from their $1,000 face value with a zero or very low coupon.
    • The disadvantage is, when the bond matures, the issuing firm will face an extremely large nondeductible cash outflow much greater than the cash inflow they experienced when the bonds were first issued.
    • On the other hand, annual cash outflows associated with interest payments do not occur with zero coupon bonds.
  • Junk bonds: bonds rated BB or below by S&P. The lower the rating, the higher their chance to default. Junk bonds are also called high yield bonds for the high interest rates they pay the investors because of their high risks.

 

Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code “Newclient” for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.


The post compare the different characteristics of debt bond and equity appeared first on Custom Nursing Help.

"Are you looking for this answer? We can Help click Order Now"