Friday, December 27, 2013

Comparison between Bonds And Stock Equity

Bonds Stocks Advantages of bonds: * Bonds be debt, not fair play, so the ownership and promise of the caller are not diluted. * Tax-deductible in pastime expense. * The diminished interest rates on bonds allow for positive monetary leverage. Advantages of a corporation * Simple to become an owner * abstemious to transfer ownership * Provides limited liability Disadvantages of bonds: * pretend of nonstarter; the debt must be paid back regularly, or creditors for hold force legal action. * Negative impact on specie flows. Stockholders rights * Voting (in person or by proxy). * proportionate distributions of pay * Proportionate distributions of as executes in a liquidation Characteristics of Bonds Payable * When military issue bonds, potential buyers of the bonds are given a prospectus. * The companys bonds are issued to investors by dint of an underwriter. * The trustee makes sure as shooting the issuer fulfills all of the nourishment of the bond indenture.
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Types of Capital Stock Common Stock * elementary suffrage declension * Ranks after preferred stock * Dividend set by board of directors Preferred Stock * perceptiveness all over uncouth stock * ordinarily has no voting rights * usually has a fixed dividend rate Treasury Stock * No voting or dividend rights * Contra equity account Bond Classifications * debenture bond bonds Not secured with the pledge of a specific asset. * due bonds may be retired and repaid (called) at any time at the cream of the issuer. * Redeemable bonds May be turned in at any time for repayment at the option of the bondholder. * redeemable bonds May be exchanged for other securities of the issuer (usually shares o f common stock) at the option of the bondhol! der. Stock Classifications Authorized Shares The maximum number of shares of hood stock that can be sold to the public. * Issued shares are... If you want to get a full essay, order it on our website:

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