Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Bond Selection
A "make-whole" call allows the issuer of a bond to pay off the bond early. The payment to the bondholder is based on the net present value of the future payments remaining on the bond (Investopedia, 2012). This provision does not necessarily make the investors whole. The investors receive the net present value of the future payments on the bond. For the investor, the discount rate used to calculate the net present value should be the same rate at which the investor can re-invest those funds with the same risk level. In many cases, however, the discount rate used for the NPV payment would either be written into the provision, or would be determined by the bond issuer. Thus, the discount rate could be a higher or lower than the reinvestment rate of the investor. So while there is no guarantee that this provision would fail to make the investor whole, there is the risk to the investor that he or she might not be made whole should the provision be called. They should both reflect the current risk situation with respect to prevailing interest rates, so that the yield to maturity is neural to the type of bond issued. Over time, however, changes in interest rates would have an impact on the value of the bond. Thus, whether a zero coupon bond or a normal coupon bond is better would depend on the issuer's view of future interest rate changes. Unless there is a compelling financial reason to issue a zero coupon bond -- and bear in mind that expectations of future rate changes are basically gambling -- I would recommend a regular issue simply because there is a bigger market for regular bond issues than there is for zero coupon bond issues. I would also recommend offering a normal call feature rather than a make-whole call feature. The risk associated with the make-whole feature that could result in a small loss…
Works Cited:
Investopedia. (2012). Make whole call provision. Investopedia. Retrieved February 12, 2012 from http://www.investopedia.com/terms/m/make-wholecall.asp#axzz1m6xHDhx6
Oanda. (2012). Historical exchange rates. Oanda.com. Retrieved February 12, 2012 from http://www.oanda.com/currency/historical-rates/
Group Communication and Decision-Making Methods This paper will focus on two primary factors important for the leaders, in the modern world, to completely conquer. These two factors are: Group Communication Decision making methods The paper also provides proof using prior researches done on the aforementioned subjects, focusing primarily on the role of the leader in instigating motivation amongst the employees as well as improving the overall decision making processes. The paper will also take
Behavioral Finance and Human Interaction a Study of the Decision-Making Processes Impacting Financial Markets Understanding the Stock Market Contrasting Financial Theories Flaws of the Efficient Market Hypothesis Financial Bubbles and Chaos The stock market's dominant theory, the efficient market hypothesis (EMH) has been greatly criticized recently for its failure to account for human errors, heuristic bias, use of misinformation, psychological tendencies, in determining future expected performance and obtainable profits. Existing evidence indicates that past confidence in the
The understanding of TMJ anatomy as well as its function is very important to generate stable as well as healthy intercuspation. TMJ consists of condyle, disk, muscles and ligaments. It connects the lower jaw to the temporal bone in the skull in both sides and has two movements (Rosenstiel and Land, 2001). The TMJ along with muscles stabilization is the starting point to get the ideal maxilla-mandibular relationship in
These refer to the characteristics of the political and regulatory environment (P), the economic environment (E), the socio-cultural environment and finally, the technological environment. The analysis of the climate in which an organization activates is also known as the PEST analysis. 4.1 Company Product Line Starbucks offers a wide selection of coffee-based beverages, with both caffeine and without caffeine. Aside their coffee beverages, they also offer whole-bean coffees, food items and coffee-related
Hill People Page In 1997, when Kirk Watson was running for mayor, Austin was in the drunken throes of enjoying a decade-long spell of unprecedented, economic growth. Unemployment was on the downswing. Corporate relocations and expansions were on the upswing. Venture capitol and new business creation was rising to an all-time high. Office buildings, apartment complexes, new home subdivisions, retail centers, along with all the roads to support them, were sprouting
The subjects were 613 injured Army personnel Military Deployment Services TF Report 13 admitted to Walter Reed Army Medical Center from March 2003 to September 2004 who were capable of completing the screening battery. Soldiers were assessed at approximately one month after injury and were reassessed at four and seven months either by telephone interview or upon return to the hospital for outpatient treatment. Two hundred and forty-three soldiers