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Corporate Financing Using Bonds

Corporate Financing Using Bonds. Statistics & Risk Management. Why Bonds?. Issuing bonds do not convey ownership. Considered debt only. Bond Sales. Bond have a face value. Discounts Premiums Interest Rates Maturity Dates Bonds can be sold and resold at market value. Defaults.

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Corporate Financing Using Bonds

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  1. Corporate Financing Using Bonds Statistics & Risk Management

  2. Why Bonds? Issuing bonds do not convey ownership. Considered debt only.

  3. Bond Sales • Bond have a face value. • Discounts • Premiums • Interest Rates • Maturity Dates • Bonds can be sold and resold at market value.

  4. Defaults Interest payments and bond pay off have been put in default. Bond Holders get available funds before stock holders do. What happened to General Motors Bonds/Stocks?

  5. Bonds Ratings Through the years, businesses have been established who rate the risk of bonds being issued. Base Ratings the bond is evaluated Insured Ratings is when the bond is insured and the rating only applies to the insurer. Be careful you understand what the rating is really evaluating when you buy a bond.

  6. Special Bonds Some special bodies and agencies can issue Municipal Bonds that pay interest that is non taxable (Federal Income tax) to the bond holder. What do you think is the reason for this?

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