Although dividend recapitalization is beneficial to shareholders who can recover their initial investments, it can also be dangerous for the company that undergoes the process. As a company increases its leverage, there is a higher probability of default on its financial obligations. Therefore, the re...
They have an interest rate determined by the standard interest rate issued by the Federal Reserve and maturities of five years or less. Government bonds tend to have relatively low interest rates in exchange for their safety, while corporate bonds may be more variable. What is a Government Bo...
For prospective investors and many others, it is important to distinguish between bonds vs. stocks. Two of the most common asset classes for investments are
Corporate Finance›What are Convertible Bonds? Definition: A convertible bond is a debt instrument that the bondholder can trade in to the issuing corporation for a specific number of its common stock shares. In other words, it’s a bond that can be returned to the issuing corporation in ...
The purpose of this article The purpose of this study is to identify the occurrence of misselling in the process of offering and selling corporate bonds of GetBack SA. Methodology. The study included a literature review, analysis of secondary data derived from official documen...
Definition:The credit spread, also called a yield spread, is the difference between two bonds’ yields that are the same in all respects except their credit rating. In other words, it’s the risk of alternative interest bearing securities (eg corporate bonds) compared to a benchmark. ...
The former deals with government securities like treasury bills and bonds whereas the latter deals with corporate bons and mortgage backed securities also along with the government securities. The impact of the former is small and limited unlike te latter in which the impact is large because it in...
How Do Exchangeable Bonds Work? For example, let's consider a Company XYZbondthat is exchangeable into shares of Company ABC at an exchange ratio of 50:1. This means that you could exchange every $1,000 ofpar valueyou own of XYZbondsinto 50 shares of ABCstock. ...
Mostmunicipal bondsand somecorporate bondsare callable. A municipal bond has call features that may be exercised after a set period such as 10 years.1 Sinking fundredemption requires the issuer to adhere to a set schedule while redeeming a portion or all of its debt. On specified dates, the...
Corporate refinancingis the process through which a company reorganizes its financial obligations by replacing or restructuring existing debts. Corporate refinancing is often done to improve a company's financial position and can also be done while a company is in distress with the help ofdebt restru...