What is a bond? It is a corporate or government debt instrument. It represents a loan to the company from the investing public. In this case, the company is the borrower and the investor is the lender. Companies issue bonds to raise money for business investments. What is a Bond? A bond has a par value,
See Also: What is a Bond Non-Investment Grade Bonds Covenant Definition of a Bond Contract Yield to Maturity of a Bond Financial Instruments Zero Coupon Bonds Zero coupon bonds are a debt security that does not have periodic interest payments. The bond, issued at a deep discount from par value, compensates for the lack of
See Also: What is a Bond Non-Investment Grade Bonds Covenant Definition of a Bond Contract Zero Coupon Bonds Financial Instruments Yield to Maturity Concept The yield to maturity (YTM) of a bond represents the annual rate of return for the full life of the bond. The YTM assumes the investor will hold the bond to
Par Value of Bonds Definition The par value of bonds definition refers to the principal – the amount of money the bondholder receives when the bond matures. Par value is also called face value or nominal value. It is the amount stipulated in the bond contract. However, par value does not include interest payments. Bond
See Also: Common Stock Definition Preferred Stocks (Preferred Share) Treasury Stock (Repurchased Shares) Owner’s Equity Balance Sheet Paid in Capital Definition The paid in capital definition is the total amount paid on equity or stock over the par value of the stock. In addition, it is a balance sheet account in the stockholder’s equity section. This
See Also: Convertible Debt Instrument NonInvestment Grade Bonds Collateralized Debt Obligations External Sources of Cash Certificate of Deposit (CD) What Your Banker Wants You To Know Commercial Bank Convertible Debt Instrument Commercial Paper Definition Commercial paper is a short-term debt instrument. Companies can borrow money by issuing it to investors. It is unsecured, meaning collateral
See Also: Dividends Dividend Payout Ratio Dividend Yield Capital Structure Management Balance Sheet Capital Impairment Rule The capital impairment rule is a state-level legal restriction on corporate dividend policy. The rule applies in most U.S. states. It basically limits the amount of dividends a company can pay out to shareholders. The limit is described as
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