Advantage And Disadvantage Of Serial Bonds

Bonds can be issued by corporations, municipalities and the federal government. As a fixed income investment, bonds pay interest to investors until maturity. Convertible bonds give holders the benefits of fixed income, but can provide a higher current yield and less downside. Microsoft Picture It Photo Premium 10 By Wcw more. Serial Bonds d. Convertible Bonds e. An advantage of bond financing is: a. A disadvantage of bonds is: a.

Advantages and Disadvantages of Bonds. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.

Chapter Outline Chapter Outline Notes I. Basics of Bonds A. Bond Financing 1. A bond is its issuers written promise to pay an amount identified as the par value of the bond with interest. Most bonds require the issuer to make periodic interest payments.

The par value of a bond, also called the face amount or face value, is paid at a specified future date known as the maturity date. Advantages of bonds a. Bonds do not affect owner control.

Interest on bonds is tax deductible. Bonds can increase return on equity. A company that earns a higher return with borrowed funds than it pays in interest on those funds increases its return on equity. This process is called financial leverage or trading on the equity). Disadvantages of bonds a. Bonds can decrease return on equity.

A company that earns a lower return with borrowed funds than it pays in interest on those funds decreases its return on equity. Bonds require payment of both periodic interest and par value at maturity. Equity financing, by contrast, does not require any payments because cash withdrawals (dividends) are paid at the discretion of the owner (board). Types of Bonds 1. Secured bonds have specific assets of the issuer pledged (or mortgaged) as collateral. Design Of Liquid Retaining Concrete Structures Pdf To Excel here.