Business Finance Chapter 7 Stock and Bonds 7.5 Bonds

Bonds - Business Finance - ثاني ثانوي

PART 1

Chapter 1 An Introduction to Basic Finance

An Introduction to Basic Finance

1.1 The Divisions of Finance

1.2 Key Financial Concepts

1.3 Finance and Other Business Disciplines

Summary

Chapter 2 The Role of Financial Markets and Financial Intermediaries

The Role of Financial Markets and Financial Intermediaries

2.1 Financial Markets

2.2 Financial Intermediaries

2.3 Regulation of Financial Institutions

Summary

Chapter 3 Analysis of Financial Statements

Analysis of Financial Statements

3.1 General Accounting Principles

3.2 The Balance Sheet

3.3 The Income Statement

3.4 Statement of Cash Flows

3.5 Financial Statement Analysis

3.6 Liquidity Ratios

3.7 Activity Ratios

3.8 Profitability Ratios

3.9 Leverage Ratios

3.10 Coverage Ratios

3.11 Limitations of Accounting Data

Summary

PART 2

Chapter 4 An Introduction to Financial Markets

An Introduction to Financial Markets

4.1 Markets

4.2 The Mechanics of Investing in Securities

4.3 Special Security Purchases

4.4 Measures of Securities Prices

4.5 Foreign Securities

4.6 Competition in the Securities Markets

Summary

Chapter 5 Opportunity Costs and the Time Value of Money

Opportunity Costs and the Time Value of Money

5.1 Opportunity Costs

5.2 The Future Value of a Single Amount

5.3 The Future Value of a Series of Amounts (Annuity)

5.4 The Present Value of a Single Amount

5.5 The Present Value of a Series of Amounts (Annuity)

5.6 Other Time Value of Money Situations

Summary

Chapter 6 Risk and Its Measurements

Risk and Its Measurements

6.1 Risk

6.2 The Return on an Investment

6.3 The Sources of Risk

6.4 Risk Measurements

6.5 Risk Management Strategies

Summary

Chapter 7 Stock and Bonds

Stock and Bonds

7.1 Sources of Funding

7.2 Common Stock

7.3 Dividend Policy

7.4 Preferred Stock

7.5 Bonds

7.6 Retiring Debt

Summary

Chapter 8 Cost of Capital

Cost of Capital

8.1 Cost of Capital Components

8.2 A Weighted-Average Cost of Capital

8.3 The Optimal Capital Structure

8.4 Other Capital Structure Issues

Summary

Glossary

7.5 Bonds

A bond

7.5a Characteristics of All Debt Instruments

Principal

Maturity date

Current yield/Yield to maturity

Coupon

Indenture

7.5 Bonds

put up to secure the loan. For example, the collateral for a mortgage loan

Default

Why might a limit be set on dividend payments?

7.5 Bonds

There are two influences on the expected return on debt instruments.

7.5 Bonds

Assume a SAR 1,000 fixed-rate bond pays 5% when the inflation rate is 3%. Investors

Another characteristic of all debt is risk. This includes the risk that the

Credit ratings

Credit ratings

7.5 Bonds

Lowest risk

7.5 Bonds

FI G U R E 7.4 A discounted bond approaching maturity

7.5b Types of Corporate Bonds

7.5 Bonds

FI G U R E 7.5 continued Types of Corporate Bonds

What does a bond with a floating rate protect against?

7.5 Bonds

Credit ratings for companies are assigned by the Saudi government.

If interest rates increase due to inflation:

Convertible bonds allow the holder the option to exchange the bond with a predetermined number of shares of common stocks.

Which of the following bonds is supported by collateral?