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16 Cards in this Set
- Front
- Back
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Contract (stated) rate
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The Bond issuer pay the interest rate secified in the indenture
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Market rate
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interest rate that borrowers are willing to pay and lenders are willing to accept for a particular bond and its risk level
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Carrying value
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A discount is deducted form the par value of bonds to yied
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Premium on bonds
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Amount by which the bond price exceeds par value
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Discount on bonds
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Occurs when a company issues bonds witha contract rate less than the market rate
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Term bonds
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Bonds scheduled for payment at a single specified date
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Sinking fund bonds
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Reduce the holder's risk require the issuer to creat a sinking fund of assets set aside at specified amount and dates to repay the bonds
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Secured bonds
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Have specific assets fo the issurer pledged as collateral
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Unsecured bonds
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Debentures, are backed by the issuer's general credit standing
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Convertible bond
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Can be exchanged for a fixed number of shares of the issuing corporation's common stock
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Callable bond
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Have an option exercisable by the issuer to retire them at a stated dollar amount berfore maturity
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Installment note
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Obligation requireing a series of payments to the lender
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Mortgage
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Legal agreement that helps protect a lender if a borrower fails to make required payments on notes or bonds
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Collateral agreements
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Can reduce the risk of loss for both boths and notes
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Par value of a bond
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Paid at a specfied future date, face value
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Bond indenture
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Legal contract between the issuer and the bond holders
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