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When a company calls a bond, it typically owes bondholders the face value of the bond plus any accrued interest up to the call date. Additionally, many bonds include a call premium, which is an extra amount paid to bondholders as compensation for early redemption. This process allows the company to refinance its debt at a lower interest rate, if market conditions permit.
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Why do stockholders typically have more control over a company than its bondholders?
Simply, because bondholders lack the voting rights that fully owned by stockholders. Thus, bondholders are not Affected by the company's performance and they are only eligible to receive a fixed income based on the bond agreement
What best explains why a bond holder is similar to a bank?
Bondholders loan money to bond issuers just asbanks loan money to customers.
Why is a bondholder similar to a bank?
Bondholders loan money to bond issuers just as banks loan money to customers.
Why a bondholder is similar to a bank?
Apex :) Bondholders loan money to bond issuers just as banks loan money to customers
Best explains why a bondholder is similar to a bank?
Bondholders loan money to bond issuers just as banks loan money to customers.
What are the financial risks associated with bond investing?
Bonds are generally safer than stocks, because bondholders get their money first if the company goes bankrupt, but sometimes the company won't even have the money to pay bondholders, in which case your bond is worthless.
Why do stockholders typically have more control over a company than its bondholders?
Simply, because bondholders lack the voting rights that fully owned by stockholders. Thus, bondholders are not Affected by the company's performance and they are only eligible to receive a fixed income based on the bond agreement
What is the accounting journal entry to record payment to bondholders?
debit bond holderscredit cash
What is a bond indenture What provisions are usually included in it?
A bond indenture is a legal document outlining the terms and conditions of a bond issuance. Provisions typically included in a bond indenture cover details such as payment terms, interest rates, maturity dates, covenants, collateral, and potential remedies for the bondholders if the issuer defaults.
What best explains why a bond holder is similar to a bank?
Bondholders loan money to bond issuers just asbanks loan money to customers.
How is a bond buyer or bondholder different from a stockholders?
A bond buyer is a lender to the company, receiving fixed interest payments and a return of principal at maturity, while a stockholder is a partial owner of the company, receiving dividends and potentially capital gains based on the company's performance. Bondholders have priority over stockholders in the event of bankruptcy, with their claims being settled before stockholders.
Do bondholders have a priority claim on assets?
Yes, bondholders typically have a priority claim on a company's assets in the event of liquidation or bankruptcy. They are considered creditors and are paid before equity shareholders when the company's assets are distributed. This priority is established in the bond's terms and the legal framework governing secured and unsecured debts. However, the degree of priority can vary depending on whether the bonds are secured (backed by specific assets) or unsecured.
Are bonds a form of debt capital?
Yes, bonds are a form of debt capital. When a company issues bonds, it is essentially borrowing money from investors in exchange for regular interest payments and repayment of the principal amount at the bond's maturity. This debt represents an obligation for the company to repay the bondholders according to the terms outlined in the bond agreement.
Bond ratings are usually NOT affected by?
the company fiscal year
Why is a bondholder similar to a bank?
Bondholders loan money to bond issuers just as banks loan money to customers.
How does the repayment of government bonds work?
The repayment of government bonds involves the issuer, typically a government, paying back the bondholders the principal amount (face value) of the bond upon maturity. In addition to the principal, bondholders receive periodic interest payments, known as coupon payments, throughout the life of the bond. These payments are made at predetermined intervals, usually semi-annually or annually. Upon maturity, the government redeems the bonds by paying back the principal, concluding the bond's financial obligation.
Is a bond indenture is a bond with no specific collateral securing it?
No, a bond indenture is a legal document that outlines the terms and conditions of a bond issue, including the rights and responsibilities of the issuer and bondholders. A bond with no specific collateral securing it is typically referred to as an unsecured bond or debenture.
