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Similarities of perpetual bond and no-growth common stock?
no growth in the value and pay interest forever
What do you call a bond that can be changed into a specified number of shares of the issuers common stock?
Such a bond is an convertible bond.
A common stock which pays a constant dividend can be valued as if it were?
preferredstock
What is a convertible bond?
In finance, a convertible bond is a type of bond that can be converted into shares of stock in the issuing company, usually at some pre-announced ratio.
Why is valuing common stock more difficult than valuing bonds?
Because the future cashflows are more uncertain for a stock than a bond.
Why preferred stock is called hybrid security?
The phrase 'preferred stock' means stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights.Preferred stocks combine features of a stock and a bond, although they differ in many aspects from both. But since principally there are only two ways to invest--to be a part owner or to lend money--preferred stocks fall somewhere in between.Similarities with Common StocksØ Like common stocks, preferred stocks represent ownership in the issuing corporation. Ø Income from preferred stocks is called dividends, as is income from common stocks.Ø Common and preferred stocks are issued as perpetual securities, with no maturity date.Similarities with BondsØ Like most bonds, preferred stocks usually pay a fixed amount of income and fluctuate with interest rates. Many bonds are also issued with a call feature; when interest rates fall, a corporation can refinance high-coupon bonds and high-dividend preferred stocks with lower-cost debt.Ø Like bond it has no voting right.Ø Like bond preferred stock holders also can establish claim profit in the form of dividend before common stock holders.Since preferred stock posses both characteristic of common stock and bond that is why it is called hybrid security.
What is a Preferred financial bond?
a bond that uses stock symbol and sells like stock
Which of these is a type of security dividend corporate bond common stock or treasury note?
None of the above are a type of dividend.
Is it better to be a stock holder or a bond holder?
The way the capitol structure is set up, Bond Holders have a better chance of getting paid then do COMMON Stock and or Preferred stock holders, But there are different level of bonds within that layer of the capitol structure. higher rate of return or possible rate of return, then the risk is there somewhere, I mean ask any of the common stock holders of C or GE
What is the differences between a stock and a bond?
A stock represents partial ownership in a company. A bond represents a loan to a company.
Which of the following are income tax deductible items to a corporation Common stock dividends preffered stock dvidends retained earnings or Bond interest expenses?
Interest expenses are tax deductible.
What is a piece of ownership in a company called?
stock or share
