Question

What could be a negative impact of investing in bonds? What is a positive aspect of...

What could be a negative impact of investing in bonds?

What is a positive aspect of investing in bonds?

Why would a company or an organization want to issue a bond?

What other options do organizations have instead of issuing bonds?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Negative impact of investing in bonds

1.Fixed interesr and Repayment at maturity  .

2 Interest rate risk : Fixed rate bonds are subject to interest rate risk

3.Exchange risk : Unanticipated risk when changes between  currencies.

Positive Aspect of investing in bonds

1.The volatility of bonds is lower than that of equities .

2.Safer investment than stocks.

3.measure of legal protection .

Why company like to issue bonds

1.Issuing bonds offers tax benefits

2.Since bonds are a form of debt ,the existing shareholders ownership interest in the company will not be diluted .

Other options

1.They can issue shares

2.They can issue debentures

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How, in today's social environment, management could have both a positive and a negative impact on...
How, in today's social environment, management could have both a positive and a negative impact on the investigations process. Make sure you consider policy implementation and case assignments.
Why would you consider investing in bonds? What drawbacks might you consider to investing in bonds?...
Why would you consider investing in bonds? What drawbacks might you consider to investing in bonds? What is meant by a premium or a discount in a bond price? Why would there be a discount of premium?
A company reported a negative net cash flows from investing activities. What could be the reasons...
A company reported a negative net cash flows from investing activities. What could be the reasons behind this negative number? Explain your answer clearly. (Word limit 150 words +/-10%)
Although stocks and bonds may both be viewed as investment opportunities, there are major differences between...
Although stocks and bonds may both be viewed as investment opportunities, there are major differences between these two. Stock represents capital, the financial investment or equity, in a corporation. In a publicly traded corporation, individuals and groups buy and own shares of stock in the company. Shares of stock are traded (bought and sold) on one of the stock exchanges. For example, you might buy shares of stock in Coca-Cola, a publicly traded company. Publicly traded companies are very different...
What test could you perform using RNA to test whether the genome is positive or negative?...
What test could you perform using RNA to test whether the genome is positive or negative? What results would you expect if virus was positive strand? What resultst would you expect if the virus was negative stranded?
Suppose your company needs to raise $40 million and you want to issue 20-year bonds for...
Suppose your company needs to raise $40 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 5.7 percent, and you’re evaluating two issue alternatives: a 5.7 percent semiannual coupon bond and a zero coupon bond. Your company’s tax rate is 21 percent. a. How many of the coupon bonds would you need to issue to raise the $40 million? How many of the zeroes would you need to...
1. a) What is negative convexity? b) Why do callable bonds sometimes have negative convexity?
1. a) What is negative convexity? b) Why do callable bonds sometimes have negative convexity?
Suppose your company needs to raise $40.3 million and you want to issue 30-year bonds for...
Suppose your company needs to raise $40.3 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 5.3 percent, and you’re evaluating two issue alternatives: a 5.3 percent semiannual coupon bond and a zero coupon bond. Your company’s tax rate is 23 percent. a. How many of the coupon bonds would you need to issue to raise the $40.3 million? How many of the zeroes would you need to...
28.Zero Coupon Bonds Suppose your company needs to raise $50 million and you want to issue...
28.Zero Coupon Bonds Suppose your company needs to raise $50 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 7 percent and you’re evaluating two issue alternatives: a semiannual coupon bond with a 7 percent coupon rate and a zero-coupon bond. Your company’s tax rate is 21 percent. Both bonds would have a par value of $1,000. a. How many of the coupon bonds would you need to...
Suppose your company needs to raise $53 million and you want to issue 20-year bonds for...
Suppose your company needs to raise $53 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 5.3 percent, and you’re evaluating two issue alternatives: a semiannual coupon bond with a coupon rate of 5.3 percent, and a zero coupon bond. Your company’s tax rate is 21 percent. Both bonds will have a par value of $1,000. a-1. How many of the coupon bonds would you need to issue...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT