Discuss the effect if a company’s bond is downgraded.
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Discuss the effect if a company’s bond is downgraded.
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- Why would a company wish to reduce its bond indebtednessbefore its bonds reach maturity? Indicate how thiscan be done and the correct accounting treatment forsuch a transaction.Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a company. Bonds require payment of periodic interest.Why might a company choose to raise money through bonds, rather than take out a note payable or issue stock? What are the advantages and disadvantages of bonds? What does it mean to issue a bond at a "premium" or at a "discount"?
- What factors determine a company’s bond rating?When a company exercises its call provision on bonds, the company pays the book value of the bonds at the time of the call. a gain occurs because the call price is generally set below the issue price. a loss occurs because the call price is generally set above the issue price. the company pays the face value of the bonds.What is the difference between a corporate bond and a registered bond?
- Which ot the following features would decrease the value of a corporate bond? A.The bond is sinior debt obligation B.The bond is convertible into shares C.The bond is secured by a mortgage on real estate D.The borrower has the option to repay the loan before maturityWhat is the difference between annuities and corporate bonds?a. Explain what a corporate bond isb. Outline the characteristics of the bond marketd. Explain the benefits of issuing bonds to raise financing
