CHAPTER 7 NOTES

CHAPTER 7 NOTES - BUS 320 Chapter 7 Notes Bonds-Long-term...

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BUS 320 Chapter 7 Notes
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Bonds-Long-term contracts under which a borrower agrees to make payments of interest and principal on specific dates to holders of the bond. Who Issues Treasury Bonds-Federal Government No Default Risk Corporate Bonds Carry Default Risk Municipal Bonds-Local Government Entities Exempt from Federal Income Tax Often exempt from state income tax if owner is a state resident. Carries some default risk Foreign Bonds-Foreign governments & corporations. Default Risk
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Par Value -Stated Face Value of Bond-(assume $1,000 for this class) Coupon Interest Rate -Stated annual interest rate on bond. Floating Rate Zero Coupon Bonds-issued at discount, no interest payments made. Maturity Date- Specified date on which par value must be repaid. Call Provisions -Gives the issuer the right to redeem bonds prior to normal maturity date. Normally carry premium rate (Call Premium) which declines over
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This note was uploaded on 04/12/2008 for the course BUS 320 taught by Professor Sloan during the Fall '08 term at N.C. State.

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CHAPTER 7 NOTES - BUS 320 Chapter 7 Notes Bonds-Long-term...

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