《财务管理基础》PPT课件

20.3
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
Bonds and Their Features
4. Discuss the advantages and disadvantages of issuing/buying the three different types of long-term securities from the perspective of both the issuer and investor.
Bond – A long-term debt instrument with a final maturity generally being
10 years or more.
Basic Terms
Par Value
Coupon Rate
Maturity
Bond Ratings
20.4
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
3. Explain the differences between various types of longterm securities in terms of claims on income and assets, maturities, security holders' rights, and the tax treatment of income from the securities.
Debenture – A long-term, unsecured debt instrument.
• Investors look to the earning power of the firm as their primary security.
• Investors receive some protection by the restrictions imposed in the bond indenture, particularly any negative-pledge clause.
• Bonds and Their Features • Types of Long-Term Debt
Instruments • Retirement of Bonds • Preferred Stock and Its Features • Rights of Common Shareholders • Dual-Class Common Stock
Chapter 20
Long-Term Debt, Preferred Stock, and
Common Stock
20.1
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
After Studying Chapter 20, you should be able to:
1. Understand the terminology and characteristics of bonds, preferred stock, and common stock.
2. Explain how the retirement (repayment) of bonds and preferred stock may be accomplished in a number of different ways.
20.2
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
Long-Term Debt, Preferred Stock, and Common Stock
• A negative-pledge clause precludes the corporation from pledging any of its assets (not already pledged) to other creditors.
Indenture – The legal agreement, also called the deed of trust, between the corporation issuing bonds and the ondholders,
establishing the terms of the bond issue and naming the trustee.
20.5
Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition. © Pearson Education Limited 2009. Created by Gregory Kuhlemeyer.
Types of Long-Term Debt Instruments
Trustee and Indenture
Trustee – A person or institution designated by a bond issuer as the official
representative of the bondholders. Typically, a bank serves as trustee.