Business Administration - Management FIS403 Chapter Notes - Chapter 16: Liquid Oxygen, Capital Structure, Debenture
30 Dec 2017
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Chapter 16 outline: key features of long-term debt, bond prices, yields, and ratings, the refunding decision, innovative forms of bond financing, advantages and disadvantages of debt, lease vs. borrow-to-purchase decision, summary and conclusions. Identify and describe the key features of long-term debt. (lo1) Differentiate bond yields and prices as influenced by how corporations and governments are rated by bond rating services. (lo2) Analyze the decision of whether or not to call in and reissue debt (refund the obligation) when interest rates have declined. (lo3) Outline some of the features of innovative forms of raising long- term financing, including zero-coupon rate bonds, floating rate bonds and real return bonds. (lo4) Outline the characteristics of long-term lease financing that make it an alternative form of long-term financing. (lo5) Par value: principal or face value (usually ,000) Coupon rate: actual or stated interest rate (distinguish from yield) Maturity date: date when repayment of principal is due.
