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8 Cards in this Set
- Front
- Back
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Call Premium Calculation
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Call Premium = Call Price - Par
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Current Yield (CY) Calculation
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Current Yield (CY) = Coupon Payment / Market Price
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Yield to Maturity (YTM) Calculation
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Annual interest - (premium or discount/years to maturity) divided by the Average price of the bond
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Normal (Positive) Yield Curve
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When short term interest rates are higher than long term interest rates.
As the term of the security increases, the yield increases. |
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Inverted (Negative) Yield Curve
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When long term interest rates are higher than long term interest rates.
As the term of the security increases, the yield decreases. |
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Parity Price of Common Stock Calculation
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Parity Price of Common Stock = Market price of the bond / conversion ratio (# of shares)
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Parity Price of Convertible
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Parity Price of Convertible = Market price of common x conversion ration
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Hiearchy of claims for Liquidation
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In order of first priority of claims:
Unpaid wages, IRS (taxes), secured debt (bonds & mortgages), unsecured liabilities (debentures) and general creditors, subordinate debt, preferred stockholders, common stockholders. |
