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Stocks and Bonds Basics
There are a number of different types of bonds that are existent. These bonds are typically redeemable in different ways and for different types of value. For instance, a convertible bond is the type that one can redeem for stock options at various prices (Yamam, 2014, p. 63). The number of stock options for which it can be redeemed varies, which affects the valuation of the bond. Another type of bond is a pure discount bond, which must mature before it can be redeemed for cash. Once such a bond does mature, however, it is always redeemable for its face value -- which certainly contributes to the factors for the valuation of this variety of bond. Other types of bonds include a callable bond. This bond enables the entity that has disseminated the bond to buy it back. However, the bond issuer can only repurchase this bond at certain periods of time, which may include predefined time periods.
Several different factors exist that help to determine the value of a particular bond. As such, there are a couple of different relationships that one must consider in properly evaluating the value of a particular bond....
The crux of the matter is that bonds are largely valued by how much currency one can redeem them for, at any point in time. Some of the relationships that influence the cash value of bonds include discount rate of bond at the time that it matures. Those attempting to redeem bonds have to account for a rate of discount -- based upon the rate of discounts for similar bonds and for similar rates -- which helps determine the amount of money they will receive for the bond. Another important relationship is that pertaining to embedded options and option pricing that can detract or add to a bond's value. Finally, there are different yields that often influence a bond's value.
It is critical to distinguish the different facets denoted by the terms common stock and preferred stock. The latter is typically regarded as a capital stock. One of the most attractive facets of a capital stock is that yields dividends and pays them out to those who hold these stocks before dividends are paid out to those that have common stock. As such, those who have the former can redeem the value of these stocks before those that have the latter can. At a more…
References
Newton, H. (2015). Common stock. Research Starters. Retrieved from http://eds.a.ebscohost.com.library.gcu.edu:2048/eds/detail/detail?sid=4e161b6e-158e-49b5-ab52-f46b3758794f%40sessionmgr4001&vid=4&hid=4108&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d#AN=89163588&db=ers
Yamam, D. (2014). Does the sequence of convertible bonds matter? Journal of Finance, Accounting & Management. 5(1), 63-87.
Corporate Governance As some queries about corporate governance were there ever since 1932 - the period of Berle and Means, the expression of the concept of Corporate Governance was not found in English vocabulary until 25 years ago. However, in the previous two decades, matters relating to corporate governance have gained importance in academic literature as well as in public policy deliberations. Corporate governance came to be acknowledged as being synonymous
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Although advertising costs can be substantial, it is essential that companies place significant amounts of funding into advertising. Such funding is necessary because it provides companies with a competitive advantage. According to Doraszelski & Markovich, (2007) "Practitioners know very well the value of advertising to achieving their long-term market share and profitability goals. A survey of senior executives in 1999 reveals that 82.9% somewhat or strongly agree that good advertising can
capital covers a number of elements regarding a company's investment and return rates. A company's cost of capital is essentially the rate of return on capital invested in the company and "the market's required rate of return on that invested capital" (4). Cost of capital covers both debt and equity capital considerations. It covers the costs of the returns from those capital investments given external market and industry factors.
Corporate Finance East Coast Yachts I My time horizon is long-run. I would want a diversified portfolio, but can afford to take the risk of equities. So the first decision is to go with 100% equities. I am not interested in company stock at the moment, because I want a diversified portfolio and I only want liquid securities with values set by the market. The company stock does not meet those criteria. In
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