Reference no: EM132890227
Bond Markets
Zero-Coupon Bonds. What are the advantages and disadvantages to a firm that issues low- or zero-coupon bonds? ANSWER: From the perspective of the issuing firm, low or zero coupon bonds have the advantage of requiring low or no cash outflow during the life of the bond. The issuing firm is allowed to deduct the amortized discount as interest expense for federal income tax purposes, which adds to the firm's cash flow. However, the lump-sum payment made to bondholders at maturity can be very large, and could cause repayment problems for the firm.
Bond Downgrade. Explain how the downgrading of bonds for a particular corporation affects the prices of those bonds, the return to investors that currently hold these bonds, and the potential return to other investors who may invest in the bonds in the near future.
Debentures. What are debentures? How do they differ from subordinated debentures?
Bond Collateral. Explain the use of bond collateral, and identify the common types of collateral for bonds.
Calling Bonds. As a result of the terrorist attack on September 11, 2001, economic conditions were expected to decline. How do you think this would have affected the tendency of firms to call bonds?
Call Provisions. Explain the use of call provisions on bonds. How can a call provision affect the price of a bond?
Global Interaction of Bond Yields. If bond yields in Japan rise, how might U.S. bond yields be affected? Why?
Protective Covenants. What are protective covenants? Why are they needed?
Impact of Credit Crisis on Junk Bonds. Explain how the credit crisis affected the defaults on junk bonds and the risk premiums offered on newly issued junk bonds.
Sinking-Fund Provision. Explain the use of a sinking-fund provision. How can it reduce the investor's risk?
Convertible Bonds. Why can convertible bonds be issued by firms at a higher price than other bonds?
Bond Indenture. What is a bond indenture? What is the function of a trustee, as related to the bond indenture?
Variable-Rate Bonds. Are variable-rate bonds attractive to investors who expect interest rates to decrease? Explain. Would a firm that needs to borrow funds consider issuing variable-rate bonds if it expects that interest rates will decrease? Explain.
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Analyzing a local company and its hr processes
: Please, present a research project that applies all HR concepts covered by analyzing a local company and its HR processes.
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Analysing the four levels of the bsc
: By analysing the four levels of the BSC offer other models for shop floor staff, managers and directors, suggesting the advantage that they would have over the
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Prepare Fore-Runner journal entries to record revenue
: Assume 30, 20, and 30 watches were delivered in January, February, and March, respectively. Prepare Fore-Runner's journal entries to record revenue
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How should JustKitchens account for contract modification
: The $11,000 fee for the additional years is the same as JustKitchens's stand-alone price. How should JustKitchens account for contract modification
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How might us bond yields be affected
: Explain the use of bond collateral, and identify the common types of collateral for bonds - how might U.S. bond yields be affected? Why?
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Explain when it would be appropriate to recognize revenue
: Problem - Revenue Recognition Control - Explain when it would be appropriate to recognize revenue over time as opposed to a point in time
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How would the income recognized in each year
: How would the income recognized in each year of this long-term construction contract be determined using the cost-to-cost method of determining progress
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What are potential legal remedies that can be taken
: Overview: There are times when HR professionals are faced with workplace situations where the laws and policies are evolving and yet ethical considerations need
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What is the t-bill discount
: You paid $98,000 for a $100,000 T-bill maturing in 120 days. If you hold it until maturity, what is the T-bill yield? What is the T-bill discount?
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