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Unformatted text preview: profitable companies. Historically, junk bonds have been associated with companies in poor financial health and/or startup firms with limited track records. Secured loans are backed by the borrower's name and good reputation. If a bond quote gives a coupon rate of 8 3/8 on a $1,000 bond, the bond owner will receive $83.75 in annual interest for that bond. Lockboxes allow a business to have access to payments made by customers more quickly than if the payments were sent directly to the company. A new issue is the sale of the first shares of stock ever issued by a particular company. The longer the expected life of an asset, the less is its potential risk. Factors purchase other companies' accounts receivable. Commercial paper is issued by commercial banks and brokerage companies. Securities markets provide liquidity. Primary markets are the markets where publicly owned securities are traded. Optimal inventory levels are determined largely by the method of production....
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- Fall '10