Bond and its response
Posted on Oct 18, 2000 08:15:27 AM
Bond – is an issued security, fixing the right of its holder to receive from the issuer of the bond provided for in her life on its face value and recorded in its percentage of this value or other property equivalent.
Bonds as objects of investment:
1) the percentage of bonds constant or varies only slightly, is paid in time, regardless of income;
2) the holders are entitled to the distributable profits and assets of the issuer upon liquidation;
3) payment of interest within a certain period;
4) buying a bond, the investor becomes a creditor;
5) bond gives the right to vote.
Bond shall certify the loan relationship between the owner (lender) and the person who issued it (the borrower). Bonds are classified into:
1) by types of issuers: T-bills, bonds internal local loans, bonds of enterprises;
2) by maturity: rent, prolonged, intermediate;
3) Registration and payment: personal; bearer;
4) the forms of payment of income: interest, interest-free;
5) the regional affiliation of the issuer: Bonds of domestic issuers, bonds of foreign issuers.
The bond has a nominal (or nominal fee), share price, exchange rate price and redemption price.
Nominal price – the value in monetary units, which is stated on the bond.
Issue price of bonds – the price at which the sale of bonds of their first owners. Issue price may be equal, less or more than face value. It depends on the type of bond and conditions of issue.
Redemption price – a price that will pay ¬ is called the bondholders at the end of the loan. In most editions of redemption price equal to face value, but it may differ from face value.
Course price – the price at which the bonds are sold on the secondary market. If the bond is strictly a nominal price, the price of redemption and issue price, the level of which is fixed with the release of the loan, the exchange rate price changes considerably during the lifetime of the bond.
Bonds are issued as a means to raise capital to finance the programs, when shareholders are seeking to increase the volume of activity.
amortization, bond, interest, loan, the issuer, the price term,- Types of Bonds
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