Exam2_FC4 - The flashcards are formatted for printing....

Info iconThis preview shows pages 1–18. Sign up to view the full content.

View Full Document Right Arrow Icon
Subordinated Convertible
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Can be changed into common stock if the company does well. Second issue of the bond (junior debt holders).
Background image of page 2
Mortgage Bonds Debentures
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
An unsecured bond, backed only by the company. Bonds tied to actual assets, like a jet that must be sold if the company goes bankrupt.
Background image of page 4
Bonds Zero Coupon
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Bond with no interest, so it must be sold at a discount below par. Pay fixed coupon (interest) payments at fixed intervals (every six months) and pay the par value at maturity.
Background image of page 6
Maturity Date Coupon Rate
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Interest rate the investor receives on bonds. The day a bond comes due, paying the par value.
Background image of page 8
Bond Indenture Bond Indenture
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The bond contract between the firm and the trustee representing the bondholders. Lists all the bonds features (coupon, par value, maturity, etc) as well as its restrictive provisions designed to protect bondholders; describes repayment provisions for retiring bonds.
Background image of page 10
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Liquidation Value Book Value
Background image of page 12
Value of an asset as shown on a firm’s balance sheet; historical cost. Amount that could be received if an asset were sold individually.
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Intrinsic Value Market Value
Background image of page 14
Observed value of an asset in the marketplace as determined by supply and demand . Economic or fair value of an asset; the present value of the asset’s expected future cash flows (theoretically what it is worth).
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Coupon Rate; Discount Rate Intrinsic Value
Background image of page 16
the present value of the stream of expected cash flows discounted at an appropriate required rate of return. If the ____ is equal to
Background image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 18
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/08/2011 for the course FIN 3403 taught by Professor Hill during the Fall '08 term at University of Central Florida.

Page1 / 63

Exam2_FC4 - The flashcards are formatted for printing....

This preview shows document pages 1 - 18. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online