Management and Organizational Studies 2277A/B Chapter Notes - Chapter 12: Sinking Fund, Market Price, Risk Premium

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2277A/B
• Professor: Barry Hawn

Document Summary

Long-term debt securities issued by government agencies or corporations that are collaterized by assets. Debentures - long-term debt securities issued by corporations that are secured only by the corporations promise to pay. Par value - face value or the amount returned to the investor at the maturity date when the bond is due. Market price - selling price, usually expressed as a percentage of the face value. Coupon interest rate - amount of interest paid out annually on a bond as a percentage of par value. Term to maturity - the date at which a bond will expire and the par value of the bond, along with any remaining coupon payments will be paid back to the bondholder. Call feature: a feature no a bond that allows the issuer to repurchase the bond from the investor before maturity. Desirable to issuer because it allows them to retire existing bonds with coupon rate that are higher than prevailing interest rates.