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Definition
| The legal capital assigned per share to no-par stock |
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| the principal amount of a security that appears on the face of the instrument. |
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| the face value or orignal principal amount of a security on its issue date |
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| for most large corporations, bonds are sold or underwritten by investment houses like Citigroup or Merrill Lynch. The issuing company (the borrower) pays a fee for these underwriting services. The process is used for the underwriter to buy the bonds from the issuer and then resell them to an investor. In doing so, the underwriter assumes a certain amount of financial risk. |
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Definition
| A contract between a firm issuing bonds and the corporations or individuals who purchase the bonds. |
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| Bonds that are supported by specific assets pledged as collateral. |
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| Bonds that are NOT supported by specific assets pledged as collateral. Secured only by the "full faith and credit" of the borrower. |
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| Require payment of the full principal amount of the bond at a single maturity date. |
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| Require payment of the principal amount of the bond over a series of maturity dates. |
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| An investment fund used to set aside money to be used to pay debts as the come due. |
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| A bond feature that allows the borrower to repay the bonds before their scheduled maturity date at a specified call price. |
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Definition
| A bond feature that allows the lender (or investor) to convert each bond into a specified number of shares of common stock. |
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| Bond Pricing - what language do we use to discuss the dollar amount it was issued at. |
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Definition
| Bonds can be issued at face amount, discount (below face amount), or premium (about face amount). |
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Term
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Definition
| Issue price is calculated as the present value of the face amount plus the present value of the periodic interest payments. |
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Definition
| Represents the true interest rate used by investors to value a bond. |
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Term
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Definition
| The rate quoted in the bond contract used to calculate the cash payments for interest. |
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