{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Exam2_FC4 - The flashcards are formatted for printing...

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

View Full Document Right Arrow Icon
Subordinated Convertible
Image of page 1

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

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

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

View Full Document Right 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.
Image of page 4
Bonds Zero Coupon
Image of page 5

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

View Full Document Right 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.
Image of page 6
Maturity Date Coupon Rate
Image of page 7

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

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

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

View Full Document Right 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.
Image of page 10
Image of page 11

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

View Full Document Right Arrow Icon
Liquidation Value Book Value
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.
Image of page 13

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

View Full Document Right Arrow Icon
Intrinsic Value Market Value
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).
Image of page 15

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

View Full Document Right Arrow Icon
Coupon Rate; Discount Rate Intrinsic Value
Image of page 16
In general, it’s equal to the present value of the stream of expected cash flows discounted at an appropriate required rate of return.
Image of page 17

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

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

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern