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Search results “Companies that have issued bonds”
Corporate Bonds
 
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Build your investment knowledge about corporate bonds and why they are issued, along with the different risks and benefits that are involved with secured and unsecured corporate bonds. Questions or Comments? Have a question or topic you’d like to learn more about? Let us know: Twitter: @ZionsDirectTV Facebook: www.facebook.com/zionsdirect Or leave a comment on one of our videos. Open an Account: Begin investing today by opening a brokerage account or IRA at www.zionsdirect.com Bid in our Auctions: Participate in our fixed-income security auctions with no commissions or mark-ups charged by Zions Direct at www.auctions.zionsdirect.com
Views: 54890 Zions TV
Bond Investing : Why Do Companies Issue Bonds?
 
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Companies issue bonds to raise money to buy equipment, to retool, to remodel buildings and to expand. Find out when a person can expect to get their money back from a company-issued bond with help from a licensed financial planner in this free video on bonds and investing. Expert: William Rae Contact: www.hbwfl.com Bio: William Rae has been licensed in the insurance and financial fields for more than 30 years. Filmmaker: Christopher Rokosz
Views: 1881 ehowfinance
Bond Issuance Examples
 
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Roger Philipp, CPA, CGMA, presents a basic bond issue with a face value of $1 million, term of 5 years, and stated or coupon rate of 8% in the video 11.01 - Bond Issuance Examples. He also shows the journal entries for issuance and interest payments at market rates or effective rates of 8%, then 10%, and then 6%. If the bond is issued to yield 8%, then the bond is issued at par and interest expense will equal the interest payment. If the effective interest rate is 10% then the bond is issued at a discount. Now interest expense will no longer equal the cash coupon interest paid. Roger explains how to set up the journal entry, keeping things simple for now with straight-line amortization of the bond discount. Roger continues the problem by showing in the journal entry how the issuer’s interest expense will equal the market rate of 10%. Finally, Roger walks through the journal entries for this 8% face rate bond issued at a premium with a yield of 6%. As an advanced bonus, Roger has us consider the effects of the bond interest payments on the statement of cash flows. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Now, next page it says issuance of bonds example and we're going to go through this example. Face value of the bonds, million dollars. Term, five year versus what? Term versus serial bond which matures in installments. Stated interest rate 8%. That's how much cash I'm going to get. I'm going to get 8% of a million dollars or $80,000 in cash but what am I earning? That's a different question. Then it says effective or market or yield is eight in example A, ten in example B, six in example C. Notice that we're going to be doing three examples. One is going to be eight, eight which is issued at par, issued at face. We don't have to worry about the discounted premium then we'll go to a discount example, then we'll go to a premium example and then life will be beautiful for you, things will make sense.
Views: 27887 Roger CPA Review
Introduction to bonds | Stocks and bonds | Finance & Capital Markets | Khan Academy
 
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What it means to buy a bond. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-the-yield-curve?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/corporate-debt-versus-traditional-mortgages?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 538252 Khan Academy
Strategy: Buying Corporate Bonds of Busted Companies
 
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Some investors take short positions in the shares of a company while buying bonds that company might have issued. PLEASE LIKE AND SHARE so we can bring you more! How does that strategy work? Lucian Miers, a renowned short seller comments. Its a good hedging strategy if you know what you're doing. You buy the bonds and you sell the shares against them on the basis that there will be a debt for equity swap at a much lower price than the current share price so your bonds will turn into huge amounts of equity which you've hedged by selling the share higher up. If you've found this video useful, please click the like button and share it with your friends and remember to SUBSCRIBE to remain up-to-date!
Views: 595 UKspreadbetting
What is a Bond | by Wall Street Survivor
 
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What is a bond? Learn more at: https://www.wallstreetsurvivor.com A bond is a debt investment in which an investor loans money to a corporate entity or government. The funds are borrowed for a defined period of time at either a variable or fixed interest rate. If you want a guaranteed money-maker, bonds are a much safer option than most. There are many times of bonds, however, and each type has a different risk level. Unlike stocks, which are equity instruments, bonds are debt instruments. When bonds are first issued by the company, the investor/lender typically gives the company $1,000 and the company promises to pay the investor/lender a certain interest rate every year (called the Coupon Rate), AND, repay the $1,000 loan when the bond matures (called the Maturity Date). For example, GE could issue a 30 year bond with a 5% coupon. The investor/lender gives GE $1,000 and every year the lender receives $50 from GE, and at the end of 30 years the investor/ lender gets his $1,000 back. Bonds di er from stocks in that they have a stated earnings rate and will provide a regular cash flow, in the form of the coupon payments to the bondholders. This cash flow contributes to the value and price of the bond and affects the true yield (earnings rate) bondholders receive. There are no such promises associated with common stock ownership. After a bond has been issued directly by the company, the bond then trades on the exchanges. As supply and demand forces start to take effect the price of the bond changes from its initial $1,000 face value. On the date the GE bond was issued, a 5% return was acceptable given the risk of GE. But if interest rates go up and that 5% return becomes unacceptable, the price of the GE bond will drop below $1,000 so that the effective yield will be higher than the 5% Coupon Rate. Conversely, if interest rates in general go down, then that 5% GE Coupon Rate starts looking attractive and investors will bid the price of the bond back above $1,000. When a bond trades above its face value it is said to be trading at a premium; when a bond trades below its face value it is said to be trading at a discount. Understanding the difference between your coupon payments and the true yield of a bond is critical if you ever trade bonds. Confused? Don't worry check out the video and head over to http://courses.wallstreetsurvivor.com/invest-smarter/
Views: 135625 Wall Street Survivor
Relationship between bond prices and interest rates | Finance & Capital Markets | Khan Academy
 
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Why bond prices move inversely to changes in interest rate. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/treasury-bond-prices-and-yields?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-the-yield-curve?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 553224 Khan Academy
Intro to the Bond Market
 
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Most borrowers borrow through banks. But established and reputable institutions can also borrow from a different intermediary: the bond market. That’s the topic of this video. We’ll discuss what a bond is, what it does, how it’s rated, and what those ratings ultimately mean. First, though: what’s a bond? It’s essentially an IOU. A bond details who owes what, and when debt repayment will be made. Unlike stocks, bond ownership doesn’t mean owning part of a firm. It simply means being owed a specific sum, which will be paid back at a promised time. Some bonds also entitle holders to “coupon payments,” which are regular installments paid out on a schedule. Now—what does a bond do? Like stocks, bonds help raise money. Companies and governments issue bonds to finance new ventures. The ROI from these ventures, can then be used to repay bond holders. Speaking of repayments, borrowing through the bond market may mean better terms than borrowing from banks. This is especially the case for highly-rated bonds. But what determines a bond’s rating? Bond ratings are issued by agencies like Standard and Poor’s. A rating reflects the default risk of the institution issuing a bond. “Default risk” is the risk that a bond issuer may be unable to make payments when they come due. The higher the issuer’s default risk, the lower the rating of a bond. A lower rating means lenders will demand higher interest before providing money. For lenders, higher ratings mean a safer investment. And for borrowers (the bond issuers), a higher rating means paying a lower interest on debt. That said, there are other nuances to the bond market—things like the “crowding out” effect, as well as the effect of collateral on a bond’s interest rate. These are things we’ll leave you to discover in the video. Happy learning! Subscribe for new videos every Tuesday! http://bit.ly/1Rib5V8 Macroeconomics Course: http://bit.ly/1R1PL5x Ask a question about the video: http://bit.ly/29Q2f7d Next video: http://bit.ly/29WhXgC Office Hours video: http://bit.ly/29R04Ba Help us caption & translate this video! http://amara.org/v/QZ06/
WHO Issues Bonds And Why?
 
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Nervous investors often flock to default risk issue bonds, they may be unable obtain an investment grade bond credit rating. What are high yield corporate bonds? Sec. Who issues bonds and why? Cameron hume. The positive economist trax who issues bonds? . It stands to reason then that the bodies issue them are borrowing money. Sthe issuance decision hedging risk management, cost incentives to issue in foreign currency, and bond market characteristics that motivate offshore such 13 apr 2016 corporate bonds are a financial tool corporation uses raise funding. Banks' much vaunted issuance of their own bonds still costs them so dearly that government backed debt for a bond issue to be success, the issuer needs ensure characteristics itself meet both its requirements and targeted. Why issue bonds offshore? Bank for international settlements. The primary market refers to those issuers that borrow most and have the greatest number of bonds in issue are governments related institutions, such as world bank, european investment bank us agencies fannie mae freddie mac finance, a bond is an instrument indebtedness issuer holders. Private placement involves the 13 aug 2016 longest dated bond issued by uk will be paid back on 22 july 2068. You can issue corporate bonds or sell shares of stock without taking a city may to raise money build bridge, while the federal government issues finance its spiraling debts. Asp url? Q webcache. Bond (finance) wikipediawhy do corporations issue bonds? Mount holyoke college. Investopedia investopedia why companies issue bonds. The interest rate companies pay bond investors is often less than the they would be required to obtain a bank loan 13 jun 2012 now that you know why want buy bonds, and what influences return can bring you, not have look at other number of different kinds entity issue bonds. Chapter 1 requirements to issue bonds world bank treasury. The uk 24 jun 2015 the different types of institutions that issue these bonds are states, towns, cities, counties, school districts, hospitals, transportation authorities, corporations have two options when it comes to raising money without taking out a loan. Why corporations issue bonds rather than stocks what is a bond? Personal finance wsj. Issue bonds why companies issue. Bonds should not be issued by companies who already carry large amounts of debt, as a bond issuance simply increases debt and makes an unstable company more so. Googleusercontent search. The most bonds are issued by public authorities, credit institutions, companies and supranational institutions in the primary markets. These include companies, public authorities and supra national institutions. Like people, companies can borrow from banks, but issuing bonds is often a more attractive proposition. Govbanks issue bonds, but government backing is key bond issuance the questions. Bonds in america investing bonds. How to issue corporate bonds (with pictures) wikihowworld news how do municipal work? Learn t
Views: 113 Pan Pan 1
Methods of Issue of Shares
 
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A basic understanding about the methods by which a company can issue its shares as per Companies Act , 2013 or the methods by which the shares can be obtained by a person !!
Views: 27252 unknown
8 Types of Investments You Should Know
 
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Free Beginners Stock Investing Course -- http://bit.ly/2CgSOLH Subscribe For More Videos -- http://bit.ly/2BKP2u4 There are many different types of investments an individual can make, however, not all investments are created equally.  Investment number 1 is a high-interest savings account. This is one of the safest ways to invest your money because there's no volatility. By placing your money in a high-interest savings account, you’re earning annual interest on your money. Now the reason I specifically say “high” interest savings accounts is because typical savings accounts offer little to no interest at all. A typical savings account usually offers around 0.10% while a high-interest account usually offers around 1.3%. Now 1.3% is by no means a high return, but the benefit here is security. You know that when you invest your money in a savings account, you’re guaranteed at least the amount you invested plus the interest earned each year. The second type of investment is a money market account. This is also one of the safest ways to invest your money because there's no volatility. I’m not going to go into too much detail because money market accounts are just another type of high-interest savings account. Although you have access to your funds with a money market account, you typically have less access than with a savings account. With a money market account, the interest rates vary, however, this type of investment usually returns somewhere between 1% and 2%. If you choose a money market account, make sure there are no monthly fees. The third type of investment is a certificate of deposit which is more commonly referred to as a CD. This is also one of the safest ways to invest your money because there's no volatility. A CD is a promissory note from a bank that pays a fixed interest over a specified amount of time. A CD is very similar to a savings account, however, it’s a very illiquid investment, meaning it’s not easily converted to cash. With a CD, investors typically set a maturity date, usually between 1 month and 5 years, which means that the investor will have to pay a penalty fee if they withdraw the money early. The fourth type of investment is a bond. Although bonds are still one of the safest investments you can make, they are just a bit riskier than the previous three. A bond is, in essence, an I Owe You Note issued by the government (local, state, or federal) or corporations. When either a company or the government is looking to fund a new project, they may issue bonds to raise the money. There are a few components to bonds. The bonds face value is the amount of money that was borrowed. The coupon rate is the rate of interest on the face value. The maturity date is when the bonds face value will be paid back to the lender. The fifth type of investment is a mutual fund. A mutual fund is basically a collection of stocks. Mutual funds vary in risk depending on the type of fund, but for the most part, mutual funds are safer than just stocks. Mutual funds are a great option for investors with little cash to invest. Some funds have investment minimums, but others have no minimums. Mutual funds are safer because they are pre-diversified collections of investments. There are many different types of mutual funds such as technology funds, bond funds, real estate funds, energy funds, foreign funds, emerging market funds, and so on. Mutual funds are operated by a fund manager that chooses and maintains the portfolio. The sixth type of investment is an Exchange Traded Fund, also known as an ETF. ETFs are similar to mutual funds, however, they are a bit riskier and are traded on an exchange like stocks. Mutual funds can only be bought or sold at the end of the day at their Net Asset Value (NAV), whereas ETFs can be bought and sold at any point throughout the day. One advantage to ETFs over Mutual funds is that they are more tax advantages. ETFs are a more hands-on investment than mutual funds. The seventh type of investment is a stock which is riskier than ETFs because there is no diversification and it is a very hands-on investment. A stock is a share of ownership of a company. The eighth type of investment is real estate. Now, this type of investment requires a lot of capital, but is a very worthwhile investment. There are two main ways you can invest in real estate: Flipping properties and renting properties. So just to recap, the 8 investments mentioned in this video are some common investments along with their riskiness. If you're a beginning investor, I encourage you to look into each of these investments further to see where you may be comfortable investing your money. In the next video, I’m going to show you the easiest way you can invest your money. I’ll see you then. Social Links: Website: www.wharmstrong.com Twitter: https://twitter.com/wharmstrong1 Facebook: https://www.facebook.com/wharmstrong1/ Instagram: https://www.instagram.com/wharmstrong1/
Views: 11280 Will Armstrong
How Municipal Bonds are Issued
 
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There are typically multiple parties involved behind-the-scenes in the process of issuing municipal bonds. Discover who they are and their respective roles in this segment for experienced investors. Questions or Comments? Have a question or topic you’d like to learn more about? Let us know: Twitter: @ZionsDirectTV Facebook: www.facebook.com/zionsdirect Or leave a comment on one of our videos. Open an Account: Begin investing today by opening a brokerage account or IRA at www.zionsdirect.com Bid in our Auctions: Participate in our fixed-income security auctions with no commissions or mark-ups charged by Zions Direct at www.auctions.zionsdirect.com
Views: 2710 Zions TV
Treasury bond prices and yields | Stocks and bonds | Finance & Capital Markets | Khan Academy
 
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Why yields go down when prices go up. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/annual-interest-varying-with-debt-maturity?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/relationship-between-bond-prices-and-interest-rates?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 252441 Khan Academy
Bonds Explained for Beginners | Bond Trading 101
 
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Earn up to 1 Year Free: https://bit.ly/2oul70h Free Resources: https://bit.ly/2wymZbJ A bond is a type of loan issued to some type of entity such as a business or government by an investor. It’s similar to borrowing money from a lender if you’ve ever purchased a home or car before. Sometimes businesses need more money than the banks will offer them, so they issue bonds as a way to raise more capital. Governments can also issue bonds when they need more money for things like roads or parks. Bonds are considered safer on the risk spectrum for investments, but they also typically carry a lower return. Benjamin Graham, author of the intelligent investor and Warren Buffets mentor, recommends holding a portfolio of 75% stocks and 25% bonds during a bull market and 75% bonds and 25% stocks during a bear market. As opposed to other investments which are considered equity, bonds are considered debt which means that if a company goes under, it must repay all bondholders before stockholders. This is due to the fixed interest nature of the bond. When the investor purchases a bond at what’s called the face value, they are paid interest, known as the coupon or yield. The reason it’s referred to as coupon is because back when bonds were actually paper, investors would physically have to clip coupons to redeem their interest. Anyway, the investor is paid a coupon on the bond until the loan is fully paid back by the issuer. This is known as the maturity date. Interest payment frequency and the maturity date is determined prior to the purchase of the bond. For example, if I purchase a $1,000, 3-year bond with a 5% coupon, I know I’ll receive $50 in interest each year for 3 years. Now it’s important to note that Bonds can vary in risk and return A AAA bond is the best bond you can buy while a Ba bond and lower are more speculative and are known as Junk bonds When it comes to bonds, the higher the return, the higher the risk. The lower the return, the lower the risk. Bonds with a longer maturity date are also riskier and carry a higher return. Typically government bonds will be safer than corporate bonds. When it comes to taxation, corporate bonds are taxed regularly while some bonds like municipal and other government bonds are tax-exempt. A bond can also be secured or unsecured With an unsecured bond, you may lose all of your investment if the company fails while with a secured bond, the company pledges specific assets to give shareholders if they fail to repay their bonds. Although bonds are considered a “safer” investment, they still do come with risks. When you purchase a bond, interest rates are out of your control and may fluctuate. Interest rates are controlled by the U.S. treasury, the federal reserve, and the banking industry. This means that if specified in your agreement, the company may be able to issue a call provision which is an early redemption of the bond. While not always the case, companies will take advantage of lower interest rates to pay back loans early. This leaves you with a lower return than what you expected. Bonds are also inversely proportional to interest rates so when interest rates go up, bonds go down and vice versa. Bonds can also be traded between investors prior to its maturity date. A bond that’s traded below the market value is said to be trading at a discount while a bond trading for more than it’s face value is trading at a premium. Bonds can be a great way to diversify your investment portfolio, however, they can also be quite complex. You can use investment platforms like Fidelity, E-Tade, or Charles Shwabb to learn more about specific types of bonds. For today’s video, we will be using Fidelity. Social Links: Website: http://www.wharmstrong.com Twitter: http://bit.ly/2DBEhdz Facebook: http://bit.ly/2F5uB8a Instagram: https://www.instagram.com/wharmstrong1/ Disclaimer: Nothing published on my channel should be considered personal investment advice. Although I do discuss various types of investments and strategies, I am not a licensed professional. Please invest responsibly. This post contains affiliate links
Views: 4716 Will Armstrong
What is PERFORMANCE BOND? What does PERFORMANCE BOND mean? PERFORMANCE BOND meaning
 
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What is PERFORMANCE BOND? What does PERFORMANCE BOND mean? PERFORMANCE BOND meaning - PERFORMANCE BOND definition - PERFORMANCE BOND explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. A performance bond, also known as a contract bond, is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. The term is also used to denote a collateral deposit of "good faith money", intended to secure a futures contract, commonly known as margin. A job requiring a payment and performance bond will usually require a bid bond, to bid the job. When the job is awarded to the winning bid, a payment and performance bond will then be required as a security to the job completion. For example, a contractor may cause a performance bond to be issued in favor of a client for whom the contractor is constructing a building. If the contractor fails to construct the building according to the specifications laid out by the contract (most often due to the bankruptcy of the contractor), the client is guaranteed compensation for any monetary loss up to the amount of the performance bond. Performance bonds are commonly used in the construction and development of real property, where an owner or investor may require the developer to assure that contractors or project managers procure such bonds in order to guarantee that the value of the work will not be lost in the case of an unfortunate event (such as insolvency of the contractor). In other cases, a performance bond may be requested to be issued in other large contracts besides civil construction projects. Another example of this use is in commodity contracts where the seller is asked to provide a Bond to reassure the buyer that if the commodity being sold is not in fact delivered (for whatever reason) the buyer will at least receive compensation for his lost costs. Performance bonds are generally issued as part of a 'Performance and Payment Bond', where a Payment Bond guarantees that the contractor will pay the labour and material costs they are obliged to. Surety Bond Companies calculate the premium they charge for surety bonds based on three primary criteria: 1) Bond Type 2) Bond Amount 3) the Applicants Risk. Once the bond type, amount, and applicant risk are adequately assessed, a surety bond underwriter is able to assign an appropriate surety bond price. Surety Bond Companies have actuarial information on the lifetime claims history for each bond type. Over time, surety bond underwriters are able to determine that some surety bonds are more risky than others. For example, A California Motor Vehicle Dealer bond has significantly more claims than a straightforward notary bond. If a given surety bond type has paid out a high percentage of claims, then the premium amount paid by applicants will be higher. Surety Bond companies attempt to predict the risk that an applicant represents. Those who are perceived to be a higher risk will pay a higher surety bond premium. Since Surety bond companies are providing a financial guarantee on the future work performance of those who are bonded, they must have a clear picture of the individuals history. In the United States, under the Miller Act of 1932, all Construction Contracts issued by the Federal Government must be backed by Performance and Payment Bonds. States have enacted what is referred to as “Little Miller Act” statutes requiring Performance and Payment bonds on State Funded projects as well. There are over 25,000 types of Surety Bonds in the United States. Each bond has a designated bond amount. Surety Bond companies will determine bond rate based on risk and then charge a surety bond premium in the range 1-15% of the bond amount.
Views: 4398 The Audiopedia
Stock dilution | Stocks and bonds | Finance & Capital Markets | Khan Academy
 
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Why the value per share does not really get diluted when more shares are issued in a secondary offering. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/acquisitions-with-shares?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/venture-capital-and-capital-markets/v/chapter-11-bankruptcy-restructuring?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: When companies issue new shares, many people consider this a share "dilution"--implying that the value of each share has been "watered down" a bit. This tutorial walks through the mechanics and why--assuming management isn't doing something stupid--the shares might not be diluted at all. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 102380 Khan Academy
What Are Contract Surety Bonds?
 
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In the world of contract surety there are two basic categories – Construction Surety Bonds and Commercial Contract Surety Bonds. Video Transcript: We previously discussed that while Contract Surety Bonds are issued by insurance companies, surety is NOT like the insurance you get for your home, car or business… In the world of contract surety there are two basic categories – Construction and Commercial. In construction contract surety there are a number of bond types that may be needed. Bid bonds, performance bonds and payment bonds are the most prevalent; but, you may sometimes see: warranty bonds, maintenance bonds and subdivision bonds. When an owner, usually a public entity… but not always, decides to put a construction project out to bid, they will provide the outline, plans and specifications for that job to either a specific list of contractors or the general public. The owner (the Obligee) will set a date and time for the bids to be turned in. And here is a tricky fact…. Often a General Contractor (GC) who has been awarded a large contract will put parts of that same contract out to bid to subcontractors who specialize in certain trades. Since the GC is responsible for the entire job, even the parts they don’t perform themselves, the GC will want assurance that their subcontractors will perform the work to the contract specification so the GC will require their subs to get bonded as well. In this instance the GC becomes the Obligee to its subs and the sub-contractors are the principals. Most Obligees require the posting of a “Bid Security” in the form of a cashier’s check or a bid bond. The amount of the bid security is usually 10%, but can range from 5% to 25% or more. The bid bond guarantees that the lowest qualified bidder will sign the contract and provide the required surety bonds. For a Contractor to qualify for these bonds, they must demonstrate to the Surety their experience, expertise, staffing, cash flow, reserves and character to manage, properly perform and accomplish the work. The surety provides the bonds that allow you to get the job; but they do so with the understanding, as discussed in our “What is Surety” video, that their guarantee will never have to be acted upon. The number one rule in surety is that if the surety thinks that a requested contract bond (visual: Bid, Performance, Payment, etc.) might have a claim, then the surety will decline the request…. Period. The Extension of Surety Credit is Based Upon Zero Loss Potential. Sometimes problems occur and jobs run into trouble and claims happen. Sureties understand this and expect the contractor to step up and take care of the problem, as necessary. How a contractor manages the problems says a lot about their character and once a problem is managed and resolved, the experience can even help the contractor going forward since they have shown the ability to do what is necessary to solve the problem. Often a positive result to a job problem provides the surety underwriter with a better comfort level in regards to the character of the contractor, which can help when trying to grow their surety support. Speaking of Surety Underwriters, these are the individuals who analyze the contractors’ information and the contract to determine if the surety can support the contractor and their request. In the past, all contractors were required to provide significant financial information in order to qualify for contract surety support. Over the last decade this has changed… A bit. Today, there are many surety programs that have adjusted their entry level requirements to allow an easier path for contractors to get started in the world of surety bonded contracts. There are a number of “Application Only” programs that only need a completed application and possibly some limited financial information to provide surety bonds for single jobs up to around $500,000 and also support a total multi-job surety bonded program (aggregate) up to around $1 million or more. This is the industry’s effort to reach out and help contractors get some experience in public sector jobs or jobs that require surety bonds. Once a contractor wishes to graduate to bigger works, they will need to bring substantially more financial information to support the larger surety bond program. What is needed????? That we will save for another time. I hope our little video has given you a good insight into contract surety bonding and we look forward to sharing more surety specific information in the future….
Views: 7821 South Coast Surety
Credit risk in bonds
 
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Credit risk in bonds I've tried to emphasize interest rate risk when you invest in bonds because many people don't understand this risk even though it's probably the biggest risk facing today's bond investor. But almost everyone understands credit risk. Credit risk is the risk that the issuing company or government can't meet the promised interest or principal payments. US Treasuries face least credit risk In this case, US Treasury bonds and mortgage securities called Ginnie Maes offer the highest credit ratings. These securities are backed by the "full faith and credit" of the US government. Government agency securities After US Treasuries and Ginnie Maes come debt issued by quasi-governmental agencies like the Federal Home Loan Mortgage Corporation also known as Freddie Mac. Although debt issued by these corporations does not carry the explicit backing of the US government, most bond traders believe the government will back up the companies if their bankruptcy is threatened. Blue chip corporations Next comes the debt of large, blue chip corporations like General Electric. This debt is normally called investment grade debt. Debt issued by large corporations is normally rated by independent companies like Moody's, and Standard & Poors. These companies do extensive research into the issuing company's ability to repay their bonds. Hierarchy of claims Before we jump further down into junk bonds, we should spend a little time talking about the hierarchy of claims on a company's assets and see what happens if a company files or is forced into bankruptcy. According to the US Constitution, bankruptcy proceedings are handled by federal law. US bankruptcy laws were rewritten in 1978 to change the traditional pecking order of those who can make claims against a bankrupt company. Lawyers and the IRS are highest Highest on the pecking order is the bankruptcy lawyers. Lawyers write the laws, so it shouldn't be too surprising that they want to get paid for their efforts as they try to dole out the company's assets. Next comes the IRS, then the firm's employees and their pension funds. After them come the company's secured creditors. These creditors have loaned the company money, but the loan is secured by a mortgage on a piece of real property like a building or heavy equipment. Most blue chip debt is unsecured Although secured debt is common for smaller companies, the majority of blue chip corporate debt is unsecured debentures. Here the lender only has the promise that the firm will honor its debt. This is similar to unsecured credit card debt that most consumers carry. However, there are several levels of unsecured debt. So-called senior debt holders are paid off before junior or subordinated debt holders. Unsecured creditors also include the suppliers who provided the company with merchandise. After the junior debt holders come the preferred stockholders. Finally, if there's any money left, the common stockholders receive compensation for their ownership in the company. Chapter 11 and 7 bankruptcy There are two forms of corporate bankruptcy, named for sections in the federal law which govern their policies. One is Chapter 11, and this type appears in the news most often. In this case, the company continues operation, but it receives a temporary reprieve from its creditors while it works out a debt repayment plan. The second is Chapter 7. In this more extreme case, the company is liquidated and assets are sold off to satisfy creditors. A company can be forced into bankruptcy by its creditors if the company fails to meet its obligations. The company also voluntarily can choose to file for bankruptcy. Once in bankruptcy, a federal court plays a major role in the handling of claims. Typical bankruptcy reorganization Although it's difficult to generalize about bankruptcy proceedings, if a company files for bankruptcy, and then later re-emerges as an operating company, the old creditors and shareholders have their claims shifted down one level in the claims hierarchy. For example, the old senior debt holders become junior creditors, the old junior debt holders become stockholders and the old stockholders lose everything or perhaps get some equity warrants. Ratio analysis for credit worthiness To avoid the unpleasantness of bankruptcy, bond investors and independent rating agencies analyze a company's financial condition. Typically, investors look at various ratios to see if the firm is a good risk. One of the most common ratios is the firm's current ratio. Current ratio Times interest earned ratio Debt to equity ratio Copyright 1997 by David Luhman
Views: 1036 MoneyHop.com
Key Things to Know about Fixed Income ETFs | Fidelity
 
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Find out more about exchange-traded funds with us at the https://www.fidelity.com/learning-center/investment-products/etf/overview To see more videos from Fidelity Investments, subscribe to: https://www.youtube.com/fidelityinvestments Facebook: https://www.facebook.com/fidelityinvestments Twitter: https://www.twitter.com/fidelity Google+: https://plus.google.com/+fidelity LinkedIn: https://www.linkedin.com/company/fidelity-investments ------------------------------------------------------------------------------------------ Fixed income can be a critical part of nearly every well-diversified portfolio. Used correctly, fixed income can add diversification and a steady source of income to any investor’s portfolio. But how do you choose the right fixed-income ETF? The key to choosing the right fixed-income ETF lies in what it actually holds. U.S. bonds or international bonds? Government securities or corporate debt? Bonds that come due in two years or 20 years? Each decision determines the level of risk you’re taking and the potential return. There are many types of risks to consider with bond investing. Let’s talk more about two in particular: Credit risk and Interest-rate risk. Determining the level of credit risk you want to assume is an important first step when choosing a fixed-income ETF. Do you want an ETF that only holds conservative bonds—like bonds issued by the U.S. Treasury? Or do you want one holding riskier corporate debt? The latter may pay you a higher interest rate, but if the company issuing the bond goes bankrupt, you’ll lose out. ETFs cover the full range of available credit. Look carefully at the credit quality composition of the ETFs underlying holdings, and don’t be lured in by promises of high yields unless you understand the risks. Bonds are funny. Intuitively, you would assume that higher interest rates are good for bondholders, as they can reinvest bond income at higher prevailing interest rates. But rising interest rates may be bad news, at least in the short term. Imagine that the government issues a 10-year bond paying an interest rate of 2%. But shortly thereafter, the U.S. Federal Reserve hikes interest rates. Now, if the government wants to issue a new 10-year bond, it has to pay 3% a year in interest. No one is going to pay the same amount for the 2% bond as the 3% bond; instead, the price of the 2% bond will have to fall to make its yield as attractive as the new, higher-yielding security. That’s how bonds work, like a seesaw: As yields rise, prices fall and vice versa. Another important measure to consider when looking at interest rate risk is duration which helps to approximate the degree of price sensitivity of a bond to changes in interest rates. The longer the duration, the more any change in interest rates will affect your investment. Conversely, the shorter the duration, the less any change in interest rates will affect your investment. Let’s review a few other considerations when looking at fixed income ETFs. First, expense ratios: Because your expected return in a bond ETF is lower than in most stock ETFs, expenses take on extra importance. Generally speaking, the lower the fees, the better. Second, tracking difference: It can be harder to run a bond index fund than an equity fund, so you may see significant variation between the fund’s performance and the index’s returns. Try to seek out funds with low levels of tracking difference, meaning they track their index well. Finally, some bonds can be illiquid. As a result, it’s extra important to look out for bond ETFs with good trading volumes and tight spreads. There are other factors to watch for too, but these are the basics. ETFs can be a great tool for accessing the bond space, but as with anything, it pays to know what you’re buying before you make the leap. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, Rhode Island, 02917 723251.2.0
Views: 61662 Fidelity Investments
Issuance of Bonds Journal Entry - Lesson 1
 
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In the video, 11.03 - Issuance of Bonds Journal Entry – Lesson 1, Roger Philipp, CPA, CGMA, provides a conceptual overview of everything that could be involved in a bond issuance journal entry, from the issuer’s point of view, step-by-step. - Step 1: Credit bonds that are payable for the face amount of the bonds. - Step 2: Credit any Accrued Interest Payable – the bond may have been accruing interest for some months before issuance. If there is accrued interest payable, it must be added to Cash in the next step. - Step 3: Debit Cash for any accrued interest payable plus either the present value of the lump sum and the annuity, as covered in previous lessons, OR for the issuance face percentage give in the problem, e.g. 101 or 98. Also for Step 3, bond issue costs or BIC are subtracted from Cash. - Step 4: Bond issue costs which are debited separately and which will be amortized straight-line over the period the bonds are outstanding. - Step 5: Add the plug – if a debit plug is needed, it’s a discount; if a credit plug is needed, it’s a premium. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Okay, now hopefully bonds are starting to make a little bit of sense, but let's continue on. You'll see here, journal entry at issuance, and we're talking about BIC and accrued interest. So what I'm going to do, is I'm going to give you pretty much anything and everything they ever test you on. They don't usually test this much of it, but I'm going to give it all to you, just so we're having a good time. Now, as we got through this, there are certain things that fall into our journal entry. And here's what we're going to look at. And I'm going to make it like a one, two, three, four, and then we'll go through the details. So here's what our journal entry will basically look like, we'll have a one, two, three, four, five or five. Hmm, very interesting.
Views: 21776 Roger CPA Review
Intro to Financial Accounting: Bonds Issued at Discount & Premium; Stockholder's Equity
 
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Introduction to Financial Accounting Professor Alexander Sannella Lecture 21 00:12 Review on Recording Bonds issued at discounts (verbal) 06:03 Recording Bonds Issued at a discount 06:58 Example 08:05 Recording Discounted bonds 17:52 Straight line - Amortization Table (discount) 19:36 Example 23:20 Recording Bonds Issued at a Premium 24:15 Example (verbal) 31:22 Journal Entry 34:25 Amortization Table (premium) example 36:05 Journal Entry Questions and Answers 39:46 Question 1 46:10 Question 2 52:07 Question 3 Learning Objective 4 56:06 Retirement of Bonds at Maturity + Journal Entry 56:56 Retirement before Maturity 59:36 Reasons for retiring bonds early 1:02:05 Example of retirement before maturity + Journal Entry Learning Objective 5 1:06:24 Balance Sheet Example Learning Objective 6 1:06:45 Debt Equity Ratio Chapter 13 Learning Objective 1 1:10:57 Stockholder's Equity (Definitions of Stock Terms) When the bond interest rate is greater than the market rate, the bonds are issued at a premium. The difference between the bonds payable and the cash received is recorded as a bond premium (an adjunct account). The premium is amoritzed over the life of the bond, reducing interest expense to the lower market rate. When the bond interest rate is less than the market rate, the bonds are issued at a discount. The difference between the bonds payable and the cash received is recorded as a bond discount (contra-liability). The discount is amortized over the life of the bond, increasing interest expense to the higher market rate. Bonds can be retired before maturity by an open market repurchase or a "call." Bonds can be called at par or a price above par (which is par plus a call premium). A company will retire bonds before maturity for a variety of reasons: (1) To refinance in order to take advantage of lower market interest rates, (2) the company has excess cash and would like to avoid future interest changes and create greater financial flexibility, (3) to improve the company's debt to equity ratio, and (4) to comply with other debt agreements. When retiring before maturity, the full bonds payable will typically be retired. The remaining discount or premium will be removed. The cash paid will not equal the face value. The difference will be recorded as either a gain on retirement of bonds (cash paid to retire is less than the carrying value) or a loss on retirement of bonds (cash paid to retire is more than the carrying value). A corporation is a separate entity created by law that is separate and distinct from its owners and its continued existence is dependent upon the corporate statutes of the state in which it is incorporated. Classification by ownership distinguishes between publicly held and privately held corporations. The primary objectives for accounting for stock holder's equity are to: (1) separately disclose each source of equity (due to widespread ownership and the owner-manager separation), and (2) to disclose all rights or any restrictions of rights of each class of equity security. The stockholders' equity section of the balance sheet includes several parenthetical disclosures: the terms are: authorized shares, issued shares, and outstanding shares. Authorized shares is the maximum number of shares of stock that a company can issue. It is specified in the company's charter. Issued shares are the total number of a company's shares that have been sold or distributed to shareholders over time. Outstanding shares are the number of shares of a corporation's stock that are in the hands of investors. Outstanding shares are issued shares less treasury shares. Treasury shares are the number of issued shares that have been previously issued and later reacquired by the corporation. To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Calculating Bond Issuance Proceeds
 
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What it the present value of a bond at issuance? Watch Roger Philipp, CPA, CGMA, use ‘present value’ as a verb as he explains the answer to the question in the video, 11.01 - Calculating Bond Issuance Proceeds. The face value of the bond is a lump sum, the coupon interest is an annuity. These are summed to find the present value of a bond at issuance. Use the effective interest rate to present value both the lump sum and the annuity! But is it an annuity due or an ordinary annuity due also known as annuity in arrears? In typical joking Roger fashion, Roger helpfully pats his own backside in order to demonstrate that an annuity in arrears is paid at the end of the year, which is the case with bond interest. Roger then shows how to handle the present value factor of an annuity for a bond that pays interest semi-annually instead of annually. What if the CPA Exam simply states a bond was issued at 101, or at 98? Roger explains what those numbers mean and how to calculate the bond issuance proceeds given only that information. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Now, how do you figure out how much to charge? How much cash should I charge you? How much cash should I charge you? How much cash should I charge you? Basically we're going to try to figure out what the carrying value or the amortized cost should be. In this case it’s a thousand net of a 100 is 900 which happens to be the cash. Here it happens to be a thousand which is a thousand. Here it happens to be a million one which is this plus this. Okay, there could be other factors that fall into that but we've got to figure out, okay, how much should the present value of the bonds be? When you’re present valuing the bonds, there are two things we need to present value. We need to present value the face and we need to present value the interest.
Views: 15723 Roger CPA Review
What exactly are stocks and bonds?
 
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Let's get back to the basics. Stocks and bonds are both instruments used by companies to raise capital. But what exactly does that mean and how are stocks and bonds different? Nathan Ritchison, CFP® walks you through the differences between stocks and bonds and the risk factors of both. Transcription: "Sometimes in my client meetings I get questions about or looks at least, that indicate that maybe people don't understand what a stock and a bond are. So I thought today what we do is go over what a stock and a bond are just from a very basic perspective. Both instruments are used by companies to raise capital. So a stock is usually issued to transfer ownership over from a company into an individual's name. A bond, on the other hand, is like an IOU. A debt instrument of a company. So these two instruments are really used by companies to raise capital. So a stock is really a share of a company, an ownership of a company, that then gets traded on an exchange. So depending on what the value is of a particular company and if the value increases, which we all hope it does, then the stock will become more valuable. Stocks also carry with them dividends, which are excess earnings paid out to individuals who own the shares - shareholders - in the form of excess earnings and income. Bonds on the other hand, are IOU's. Like I said, they're debt instruments. So these are issued, usually with a principal value, and then interest along the way. But at the end of the term of a bond, you're going to get your principal back. So typically, bonds have less risks than stocks because you get this guaranteed principal repayment at the end of the bond. Now if you have more questions about this please log on to purefinancial.com We have great resources there that can point you in the right direction." If you would like to schedule a free assessment with one of our CFP® professionals, click here: https://purefinancial.com/lp/free-assessment/ Make sure to subscribe to our channel for more helpful tips and stay tuned for the next episode of “Your Money, Your Wealth.” https://www.youtube.com/subscription_center?add_user=PureFinancialCFP Channels & show times: http://yourmoneyyourwealth.com https://purefinancial.com IMPORTANT DISCLOSURES: • Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, Inc. A Registered Investment Advisor. • Pure Financial Advisors Inc. does not offer tax or legal advice. Consult with their tax advisor or attorney regarding specific situations. • Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. • Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. • All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. • Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
What are Municipal Bonds? | Fidelity
 
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Learn the details behind general obligation municipal bonds – what they are, why they are created, and how they work – with this illustrated video by Fidelity. To learn more about municipal bonds, please visit https://www.fidelity.com/fixedincome-bonds/individual-bonds/municipal-bonds. To see more videos from Fidelity Investments, subscribe to: https://www.youtube.com/fidelityinvestments Facebook: https://www.facebook.com/fidelityinvestments Twitter: https://www.twitter.com/fidelity Google+: https://plus.google.com/+fidelity LinkedIn: https://www.linkedin.com/company/fidelity-investments ----------------------------------------------------------------------------------------------- Many people purchase municipal bonds as part of their overall investing strategy, but there’s quite a story behind how they are created, how they work, who’s involved. The municipal bond process can be a complicated one, so we’ll try to simplify it for you. Our story begins by paying a visit to Anytown, USA. Anytown is a great place to live. There’s a thriving cultural scene, good schools, and a strong business environment. It’s no wonder that many families have moved here. But, with lots of families now living in Anytown, the schools are bursting at the seams. The mayor, town council, and school district leaders all agree that a brand new school is needed, in addition to expansions to some of the existing school buildings. But, at an estimated cost of $30,000,000, how will the town pay for it? The town leaders come up with a plan to raise these funds by issuing bonds. This means that Anytown will borrow money from investors with the expectation of paying them back, with interest, over time. The people who will actually use the school building in the future will also be the folks paying for it. Anytown will use property tax revenues to repay the investors, backed by the full faith and taxing authority of the town. This is called a “general obligation municipal bond.” But, things can’t move forward just yet. Voter approval of the proposal is required. So, a bond proposal is developed and put on the ballot, as part of an election. The votes are tallied and the proposal is passed. At this point in our story, some new characters enter the scene: the underwriter, the bond counsel, and in most cases, the financial advisor. The financial advisor helps Anytown make decisions regarding the bond issue and works with the underwriter to determine pricing and distribution to investors. The underwriter acts as a liaison between the town and potential investors when bringing the bond issue to market. An underwriter can be chosen in two ways: via competitive sale or negotiated sale. The leaders of Anytown decide to go the competitive route, and put the bond issue out to bid. This is where the bond counsel, Smith & Jones Law Firm, enters the picture. Smith & Jones prepares the bond documents, including the Official Statement, and since Anytown has chosen the competitive route, a Notice of Sale. The Official Statement contains all the information a prospective investor needs in order to invest in Anytown’s bond issue. The underwriter will review the Official Statement and decide whether to bid on the bond. The bond counsel also writes the legal opinion, which provides justification and law for the tax exempt status of the issue and ensures that the bonds are valid and binding obligations for Anytown. The firm does not comment on the investment merit of the bond issue. Now that the legal opinion is in place, the Notice of Sale can be completed and posted. ABC Investment Bank sees the ad and is interested in underwriting it, with the ultimate goal of buying the muni bond issue from Anytown, and reselling it to investors. Before submitting a bid, however, they would like to invite other investment banks to participate with them, so they decide to form a syndicate and act as the syndicate manager. Forming a syndicate will allow the bank to share the marketing and distribution duties, as well as some of the financial risk of underwriting the bond issue. Two banks, JKL and XYZ, agree to join ABC Syndicate and they submit a bid. Back at Anytown town hall, the bid is reviewed, along with several others up for consideration. After much deliberation, the bond issue is awarded to the syndicate formed by ABC Investment Bank because they turned in the lowest borrowing cost. The syndicate goes to work as the underwriter, reaching out to individual and institutional investors to determine their interest in purchasing the bonds [...] Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917 608004.3.0
Views: 70901 Fidelity Investments
J is for Junk Bonds - The Elite Investor Club's A - Z Guide of Investing
 
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We’ve already reached the tenth letter of our investor alphabet – well done for sticking with me this far! Today we’re going to look at an asset class that has an unappealing name but which could provide returns that are very attractive. J is for junk bonds. We’ve already established that a bond is simply a loan to a government or a company. So what do we mean by a junk bond? It’s a term that came to be used in the nineteen eighties and will forever be associated with one of its pioneers, Michael Milken. One of the risks of being a pioneer is that you get arrows in your back. Ask Milken – he went to jail over junk bonds. But that’s a story for another time.. A junk bond is issued by a company which usually has a not too brilliant credit rating from the official rating agencies who measure these things. The specific definition is a rating of BB or lower from Standard and Poors or BA or below from Moodys. Because they are deemed to be high risk companies, historically they’ve had to offer much higher rates of interest than bonds issued by companies judged to be safe. So they can appeal to investors looking to diversify their portfolio and willing to accept higher risk for higher returns with at least some of their savings. I say historically because in recent years one of the strangest phenomena that I’ve seen is the massive reduction in this so called risk premium. Just like its amazing that Spain or Portugal can borrow money for not much more than Germany or Switzerland, so it is bizarre that many junk bonds now offer only marginally better returns than A rated companies. The biggest attraction for the more sophisticated investor is to find junk bonds issued by a company at the start of a major business turnaround. For example if a new management team is put in place or a new product is launched around the time that the bond is issued. Not only do you lock in a good return, but if the turnaround leads to a re-rating by the credit agencies then the value of the bond can sky rocket in a matter of days. In the junk bond peak of the nineteen eighties companies with few assets would use this paper as a means of acquiring other businesses. Then they’d use the real assets of the acquired business to pay off the debt they took on to fund the acquisition! But as they became more widely used, so the quality of the companies declined and the rate of defaults increased. Many investors got a bloody nose and the junk bond craze died out. But, memories are short. Investors who don’t learn the lessons of history are doomed to repeat them. And that’s what they’re doing right now. If the main bond markets are at risk of a sharp correction when interest rates start to rise again, I can only imagine the scorched earth that will ensue in the junk bond market. And don’t imagine that this is a tiny niche market. Over ninety five per cent of American companies with revenue over thirty five million dollars a year have their bonds rated as junk. They include household names like Delta airlines and US steel. The US junk bond market alone is worth half a trillion dollars. But this is definitely a market for sophisticated investors only. You should only invest money you can afford to lose and no more than the top five or ten per cent of your portfolio. There’s nothing wrong with allocating some of your savings to high risk high return assets. Just make sure you do some due diligence otherwise you might just as well throw darts at the Financial Times…
Views: 1036 Elite Investor TV
Is there Yield Appeal in Corporate Bonds - Right on the Money - Part 1 of 5
 
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Sub Headline: Rating the Risk Against the Yield Reward Synopsis: When a corporation wants to raise money, it can do so by offering an equity position in the company through stocks or create a form of debt called a bond. Stocks generally receive more press from the mainstream financial media, and corporate bonds seem to receive little attention. There are a plethora of bond mutual funds and ETFs on the market. The average investor generally buys bond funds for their portfolio rather than individual corporate-issued bonds. Content: Sometimes bond mutual funds and ETF holdings can give you a sense of what professional money mangers are buying and the individual bond performance in side the fund. Over the last five years, high-risk corporate bond funds have returned 6.5 to 8.33 percent,1 but the risk is not for the faint of heart. Low to below-average risk corporate bond funds have retuned 1.76 to 3.13 percent1 over the same period. There will always be outliers in reviews like this, but this gives you a little insight to the corporate bond fund market. These returns are not net of fees, so you need to investigate fund costs before moving forward. The average 5-year bank certificate of the deposit is paying around 2.25 percent and FDIC insured (depending upon the amount and how the account is titled.) Five-year fixed annuity rates are averaging 3 percent. The annuity contracts are only as good as the insurance company issuing the policy. There are several rating services available to review the financial strength of the insurance company issuing the contract you’re considering. Keep in mind bank and annuity rates are generally net of fees. But, if you have risk tolerance for the market exposure to capture potential higher returns, then corporate bond funds and ETFs could be a strategy for income. Watch the interview with investment advisor representative Dan Stockemer addressing corporate bonds. Some investors appreciate owning stocks, or in this case bonds, direct from the corporation and love the feel of certificate in their hands. There are basically three types of corporate bonds: mortgage bonds, debentures, convertible bonds and commercial paper. Physical assets like real estate and equipment generally secure mortgage bonds. Debentures are secured only be the good faith and credit of the corporate issuer. Convertible bonds can generally be exchanged into a specific number of shares in common stock. The play here is the convertible bondholder has an expectation the underlying common stock will appreciate over time. Commercial paper is essentially unsecured short-term “loans” (30-90 days) to finance a company’s immediate needs. Rating services monitor the financial strength of a corporate and their ability to pay back their bonds. It’s in your interest to engage an experienced financial planner familiar with the bond market who can offer suitable recommendations based on your goals and risk tolerance. 1 Morningstar Corporate Bond Funds 5-Year Return, 02/21/16 Syndicated financial columnist Steve Savant interviews investment advisor representative Dan Stockemer on money topics that need addressing. Right on the Money is a weekly one-hour financial talk show for consumers. (www.rightonthemoneyshow.com)
How to Double Your Money – Tax Free Bonds [8/9]
 
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Tax free bonds are issued by government enterprises which offer fixed payment of interest in return for borrowed money for a specified period. You don't have to pay any tax on the interest earned from these bonds. They typically have long term maturity of 10, 15 or 20 years. Tax free bonds can be transacted in stock exchanges. These bonds give return of around 11%-12% if bought at the time of it's issue. While, it gives a return of 9-9.5% if bought at stock exchange. Tax-free bonds are suitable for investors looking for a steady source of income annually and can afford to lock-in their capital for the long term. Tax free bonds are a risk free investment option to double money. Watch our video to know more about it.
Views: 4364 B Wealthy
Financial Accounting: Bond Prices (Premiums) & Corporations (Paid-in Capital & the Balance Sheet)
 
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Introduction to Financial Accounting Bond Prices : Premiums (Chapter 11) Corporations: Paid-in Capital & the Balance Sheet (Chapter 12) April 22nd, 2013 by Professor Victoria Chiu The Professor begins this lecture by reviewing (and completing) the journal entries involved in the issuance of bonds at a premium. She also talks about the conceptual reasons as to why companies would issue bonds at a premium. Bonds are mainly issued at a premium when the company is doing very well and is expected to do better in the future, thus they deem the bonds they issue worth more than their standard face value. She also walks the class through a problem involving recording the journal entries of the issuance of bonds at a premium as well as the amortization of the premium and the recognition of interest earned during the time. Following this, the Professor moves on to discuss the journal entries involved in adjusting for bonds payable. This involves instances where the bonds are issued in the middle of the year rather than the beginning of the year (January). This obviously affects the accrual and payment of interest. After this, the Professor displays an illustration of a balance sheet that emphasizes how current and long term liabilities are recorded on it. Examples of current liabilities shown are accounts payable, employee income tax payable, FICA tax payable, employee benefits payable, sales tax payable, unearned service revenue, and more. Following this, the Professor goes over several multiple-choice exercises to conclude the chapter before moving on to chapter 12 - paid-in capital and the balance sheet. The Professor begins the chapter by going over the basics of stockholder's equity. Paid-in capital (contributed capital) is amount that is acquired from stockholders (essentially, externally generated). The main source of paid-in capital is the issuance of common stock. Retained earnings, on the other hand, is capital that is internally generated. It is the result of profitable operations. It is net income that the company decides to keep for use within the company. Following this, the Professor goes over key terms within the corporate organization: -----Authorization is the state's permission for a given corporation (within that state) to operate. -----Authorized stock is the maximum amount of shares that a corporation is allowed to issue. -----Capital stock is defined as the individual ownership of a corporation's capital. -----Stock certificates are papers that prove that a stockholder has ownership within the corporation (essentially, they prove that the stockholders are actually stockholders). -----Stock certificates normally show basic information about the company, the stockholder's name and the number of shares issued. -----Outstanding stock is stock that is currently being held by stockholders. The Professor also differentiates between the two classes of stock - Common Stock and Preferred Stock. Common stockholders have the right to vote in company related decisions (normally, the strength of their voting power is proportionate to the number of shares they hold). Common stockholders can also receive a dividend (although it is not guaranteed - if the company is not doing well it may not give any). The Professor reviews the rights of preferred stockholders and explains the concept of stock with par vs. stock without par (no-par) before closing the lecture. ------QUICK NAVIGATION------ Video Begins with Issuing Bonds Payable at Premium (Journal Entry and Ledger Focused) Bonds Payable at Premium (Balance Sheet Presentation): 7:10 Exercise S11-8: Journalizing Bond Transactions: 17:07 Exercise S11-8 Solution Review: 22:56 Adjusting Entries for Bonds Payable: 32:33 Liabilities on Balance Sheet: 42:08 Multiple Choice Exercises: 45:49 NEW TOPIC BEGINS HERE: CHAPTER 12: Corporations: Paid-in Capital & the Balance Sheet: 58:49 Stockholder's Equity Basics: 58:24 Classes of Stock: 1:07:07 Par & No-par Stock: 1:11:17 To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Wondering what are Masala Bonds? Here's Everything You Need To Need To Know
 
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In a bid to raise cheap funds from abroad, Masala Bonds have become the newest hot instrument for Indian companies. Masala Bonds are rupee-dominated bonds issued outside India. Watch video to know more... Liked the video? Subscribe to Insight 18 and never miss our videos http://bit.ly/2qfUWJZ Facebook: https://www.facebook.com/insight18/ Twitter: https://twitter.com/Insight_18 Google Plus: http://bit.ly/2sldn0S
Views: 5674 Insight 18
Company Accounts||Issue of Shares [#1]Introductions||Issue of Shares at Par||Premium||Discount
 
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Introduction to Company accounts or Introduction to corporate accounts with an example problem. In this video we discussed about What is Authorised capital, Issued capital, unissued capital, Called up capital, uncalled up capital, Paid up capital, Subscribed capital, Calls in arrears, Reserve capital. Terms of Issues: Issue of shares at par, Premium and Discount To watch more tutorials pls visit: www.youtube.com/c/kauserwise * Financial Accounts * Corporate accounts * Cost and Management accounts * Operations Research Playlists: For Financial accounting - https://www.youtube.com/playlist?list=PLabr9RWfBcnojfVAucCUHGmcAay_1ov46 For Cost and Management accounting - https://www.youtube.com/playlist?list=PLabr9RWfBcnpgUjlVR-znIRMFVF0A_aaA For Corporate accounting - https://www.youtube.com/playlist?list=PLabr9RWfBcnorJc6lonRWP4b39sZgUEhx For Operations Research - https://www.youtube.com/playlist?list=PLabr9RWfBcnoLyXr4Y7MzmHSu3bDjLvhu
Views: 301072 Kauser Wise
What are Securities? [ The ultimate Securities Definition ]
 
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Finances can get messy. That’s why we have napkins for you. Napkin Finance gives you simple, visual, stress-saving financial tips and news. http://napkinfinance.com Securities Napkin: https://napkinfinance.com/napkin/finance-securities/ Transcript: Securities Securities are investment that allow you to own things without physically holding onto them Examples: stocks and bonds Stocks, bonds, mutual funds, and certificate of deposits marketable securities (easily bought and sold in a public market) investments or debts Government bonds and private company shares non-marketable securities (difficult to buy and sell) investments and debts Marketable = things that can be sold Non-marketable = things that can’t easily be sold “Securities” in the name may be a bit misleading Securities are not secured with collateral (assets that a borrower offers a lender to secure a loan) Why invest in securities? To build a healthy portfolio it is important to have a mix of both types of securities Two categories of marketable securities Equity provides partial ownership in an investment Debt securities represent an obligation for repayment
Views: 36909 Napkin Finance
Five Steps to Understanding a $38 Trillion Bond Market
 
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In providing litigation services to clients, it's very important that our attorneys have a good understanding of the $38 trillion dollar bond market. In this video, New Jersey forensic accountant Robert A. Bonavito explains the bond market and how it works. Companies and governments issue bonds and people buy those bonds with a stated interest rate. For example, if the government issues you a bond with a 5% interest rate on an airport they are building, it may be worth a face value of $1,000. But what does the government get who issued the bond? They get trillions of dollars to build the airport, knowing that the airport is going to have to pay this 5% fee. However, if you want to sell this bond and interest rates in the markets aren't 5%, things get a little more complicated. You don't want to give someone a bond that has a 5% interest rate on a $1,000 bond if the market rate is only 4% or less. Therefore you would raise the price of your bond to $1,100. This will make the yield go down, and that will be the new effective rate. If you look at the bond market, people are willing to pay the yield for the bond. Depending on what you want to do and fluctuations within the market, you may have to ask for more or less. For more information, please visit our website: http://www.rabcpafirm.com/ Robert A. Bonavito, CPA 1812 Front St. Scotch Plains, NJ 07076 908-322-7719 http://www.rabcpafirm.com
Other fixed income investments
 
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Other fixed income investments Convertible bonds Convertible bonds are another type of fixed income investment, but they're more of a cross between a bond and a stock. Convertible bonds are issued by smaller, growing companies. The company needs money to grow, but for some reason doesn't want to issue stock at what could be a currently low price. So the company issues convertible bonds. These bonds pay a lower interest rate than the going rate for corporate bonds of similar quality. But convertible bonds can be exchanged for new shares of the company's stock, usually at a favorable price and at the convertible bondholder's discretion. Initially, because the company's stock price is below the conversion price, bondholders don't convert their bonds into shares. But, over time, if the company's stock increases, the bonds become more valuable. So convertible bonds provide downside protection because they pay reasonably high current income, but they also have upside potential. If you have a large portfolio, you might want to place 15 percent of your bond money into a convertible bond mutual fund. Preferred stock Preferred stock, however, is one hybrid security that probably doesn't belong in an individual's portfolio. Preferred stock is really a fixed income investment and not an equity investment. Most types of preferred stock offer high, fixed dividend payments, with little chance to benefit if the company prospers. In the hierarchy of claims on a corporation's assets, preferred stock is ranked above common stock but below bonds. Preferred stock gets the name "preferred" because of this ranking above common stock in bankruptcy claims. Preferred stock is attractive to corporations The fixed payments to preferred stockholders are classified as dividends, and not as interest payments, so the payments are not tax deductible by the issuing company. Since companies that receive dividend payments can exclude most of the dividend payments from their taxable income, preferred stocks are attractive to corporations. The tax exclusion of dividends is open only to corporations, and is meant to reduce the effects of double or even triple taxation of dividends. The exclusion of preferred stock dividends means that preferred stock is more attractive to corporations than to individuals. So unless you're a corporation, you probably shouldn't invest in preferred stock. Miscellaneous fixed income plays Although I'd recommend that you stick with bank CDs, bond mutual funds, or guaranteed investment contracts when you do your fixed income investing, there are other fixed income investments out there. These include tax liens, adjustable rate mortgage funds or buying mortgages on your own. I'd recommend you stay away from these for the most part. They're riskier than you might think. Although there are plenty of other esoteric fixed income investments out there, corporate and government bonds represent by far the largest part of the fixed income market. Copyright 1997 by David Luhman
Views: 181 MoneyHop.com
High(?) Yield Bonds
 
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Dennis McCarthy - (213) 222-8260 - [email protected] - capitalmarketalerts.com - New high yield bonds are now being issued at interest rates that don't really qualify as high. Forbes magazine reports that the 30-day average high yield new issue bond yield fell to 6.11% at the end of January. If your company has debt outstanding in an amount of $100 million or more, your company should consider issuing high yield bonds at these historically low rates. Many companies continue to borrow at short-term floating rates because those rates are amazingly low. Most likely, short-term floating rates won't stay this low for 5 to 10 years, however. In contrast, today's high yield bond rates present an opportunity to lock in low rates for a long period. Also, short-term floating rate debt typically carries covenants that restrict a company. Again, in contrast, high yield bonds typically have very few covenants restricting the issuer. Please contact me to discuss raising high yield bonds or any capital market transaction. Forbes article link: http://www.forbes.com/sites/spleverage/2013/01/22/high-yield-bond-yields-hit-record-low-6-11/
Views: 142 Dennis McCarthy
Bond Investing : How Do Corporate Bonds Work?
 
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With corporate bonds, a corporation is the one that is borrowing money, and under most cases, a corporate bond is issued directly by the corporation when it first comes out. Find out how corporate bonds often have their debts paid off early with help from a licensed financial planner in this free video on bonds and investing. Expert: William Rae Contact: www.hbwfl.com Bio: William Rae has been licensed in the insurance and financial fields for more than 30 years. Filmmaker: Christopher Rokosz
Views: 6545 ehowfinance
Types of Risks Involved when Investing in Stocks, Bonds, and Real Estate
 
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Let's make the financial world very simple and understandable. Types of risks involved with investing in stocks, bonds, and real estate. Have you ever wondered exactly how much risk is involved with the investing? It never fails, when I have new clients coming in, they say they want all of the upside but none of the downside. Basically, they want their cake and to eat it too. However, the problem is you can't invest without taking some risks.  We face a variety of risks when investing route. So today I'm going to go over what those are and how you can deal with them. Types of Risk Involved with Investing 1. Market risk The risk of investments declining in value because of economic developments or other events that affect the entire market. The main types of market risk are equity risk, interest rate risk, and currency risk.  Equity risk – applies to an investment in shares. The market price of shares varies all the time depending on demand and supply. Equity risk is the risk of loss because of a drop in the market price of shares. Interest rate risk – applies to debt investments such as bonds. It is the risk of losing money because of a change in the interest rate. For example, if the interest rate goes up, the market value of bonds will drop. Currency risk – applies when you own foreign investments. It is the risk of losing money because of a movement in the exchange rate. For example, if the U.S. dollar becomes less valuable relative to the Canadian dollar, your U.S. stocks will be worthless in Canadian dollars. 2. Liquidity risk The risk of being unable to sell your investment at a fair price and get your money out when you want to. To sell the investment, you may need to accept a lower price. In some cases, such as exempt market investments, it may not be possible to sell the investment at all. 3. Concentration risk The risk of loss because your money is concentrated in a particular type of investment. When you diversify your investments, you spread the risk over different types of investments, industries, and geographic locations. 4. Credit risk The risk that the government entity or company that issued the bond will run into financial difficulties and won't be able to pay the interest or repay the principal at maturity. Credit risk applies to debt investments such as bonds. You can evaluate credit risk by looking at the credit rating of the bond. For example, long-term Canadian government bonds have a credit rating of AAA, which indicates the lowest possible credit risk. 5. Inflation risk The risk of a loss in your purchasing power because the value of your investments does not keep up with inflation. Inflation erodes the purchasing power of money over time – the same amount of money will buy fewer goods and services. Inflation risk is particularly relevant if you own cash or debt investments like bonds. Shares offer some protection against inflation because most companies can increase the prices they charge to their customers. Share prices should, therefore, rise in line with inflation. Real estate also offers some protection because landlords can increase rents over time. 6. Horizon risk The risk that your investment horizon may be shortened because of an unforeseen event, for example, the loss of your job. This may force you to sell investments that you were expecting to hold for the long term. If you must sell at a time when the markets are down, you may lose money. 7. Longevity risk The risk of outliving your savings. This risk is particularly relevant for people who are retired or are nearing retirement. 8. Foreign investment risk The risk of loss when investing in foreign countries. When you buy foreign investments, for example, the shares of companies in emerging markets, you face risks that do not exist in Canada, for example, the risk of nationalization. 9. Call Risk  This is a risk for bond issues and refers to the possibility of a debt security being called before maturity. This typically takes place when interest rates are dropping. 11. Social / Political Risk  The risk associated with the possibility of nationalization, unfavorable government action or social changes resulting in a loss of value is called social or political risk. These are just a blip of the different types of risk that are involved with investing. You can experience any of these at any time! I tell you all that because investing is complicated, which is why I implore you to hire a CERTIFIED FINANCIAL PLANNER™. Making that choice could help make your life financially simple. Contact us if you have questions about these or any more of the risks involved with investing. Thanks for watching Types of risks involved with investing in stocks, bonds, and real estate. Check out my blog, www.financiallysimple.com
Stocks and Bonds – Listing on the Vienna Stock Exchange
 
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Corporate Financing through the Vienna Stock Exchange – Stocks and Bonds. In this video, Dominik Gansloser of the Berenberg investment bank confirms that currently the market window for IPOs and capital market transactions in general is wide open. Jürgen Höblinger of Erste Group Bank AG speaks about bonds as a source of financing and the CEO of Best in Parking - Holding AG, Johann Breiteneder, talks about the change process at his company after the first bond issue. Henriette Lininger, Head of Issuers at the Vienna Stock Exchange and contact for companies interested in going public, will guide you through the video.
Views: 462 Wiener Börse
The four different types of bonds
 
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What is Investment Banking Investment banking is a specific division of banking related to the creation of capital for other companies, governments and other entities. Investment banks underwrite new debt and equity securities for all types of corporations, aid in the sale of securities, and help to facilitate mergers and acquisitions, reorganizations and broker trades for both institutions and private investors. Investment banks also provide guidance to issuers regarding the issue and placement of stock. https://www.youtube.com/playlist?list=PL_H8SEcfTAXlt5mHfRTDdNoivaUagZC87
Views: 152 The Course
Shares vs Debentures (Bonds) - Explained
 
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Shares vs Debentures or Bonds, where should you invest? A detailed comparison in hindi will help you understand the difference between investing in share market vs bond market or debenture market. Related Videos: Bonds vs Debentures - https://youtu.be/BdMg5RmMj_0 Shares vs Debentures (Bonds) - https://youtu.be/afSACc6c2c0 Types of Bonds & Debentures - https://youtu.be/5YN_Uo7stms How to Invest in Bonds & Debentures - https://youtu.be/hC9OsIzAoEk Shares vs Bonds or Debentures, आपको कहाँ निवेश करना चाहिए? हिंदी में एक detailed comparison आपको share market vs bond market or debenture market में निवेश के बीच के अंतर को समझने में मदद करेगा। Share this video: https://youtu.be/afSACc6c2c0 Subscribe To Our Channel and Get More Finance Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g To access more learning resources on finance, check out www.assetyogi.com In this video, we have explained: What is a share in the stock market? What are the risks in shares investing? What are the risks and returns of a bond or debenture? What does it mean to have shares in a company? What is a bond or debenture? Is there a higher risk in share market? What is a good investment return? Do shareholders have voting rights? Do bondholders have voting rights? Can debentures be converted into shares? Once you understand the difference between Shares, Bonds an Debentures, you can decide to invest in low risk fixed income securities or high risk equity markets. Make sure to like and share this video. Other Great Resources AssetYogi – http://assetyogi.com/ Follow Us: Facebook – https://www.facebook.com/assetyogi Instagram - http://instagram.com/assetyogi Google Plus – https://plus.google.com/+assetyogi-ay Pinterest - http://pinterest.com/assetyogi/ Twitter - http://twitter.com/assetyogi Linkedin - http://www.linkedin.com/company/asset-yogi Hope you liked this video in Hindi on “Shares vs Bonds / Debentures"
Views: 10823 Asset Yogi
Should your business have 100 or 1000000 shares? How to Buy a Small Business
 
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Learn to buy a business: http://www.BusinessBuyerAdvantage.com Learn to sell your business: http://www.HowToSellMyOwnBusiness.com Join my email list/ see my blog: http://www.InvestLocalBook.com Related article: Should my Small Business have 100 or 1,000,000 Shares? How do Shares work? Over the last two weeks I’ve had two different clients who were somewhat confused about how shares work in a corporation. Both were small business owners. One owner was trying to pass the family business on to their children. They asked me how to ‘transfer their shares’ from the established corporation to the new corporations of their children. Hmmmm… The other client was a pair of entrepreneurs who wanted to bring on a third partner and have his investment go into the company. They weren’t sure how to accomplish this. I taught them how they could achieve their goals by splitting their existing shares and have the corporation issue new shares to the new partner. Not sure what I’m talking about? Learn how to use a corporation’s shares to make your deals in this video: https://youtu.be/1EjKjSAd1F8 Please remember to like and share this article, it’s the only way the people who run the internet have of knowing if the content is any good or not. The more you share, the more likely someone who needs this information will be able to find it. If you would like to hear from me weekly before anyone else, you can sign yourself up at www.DavidCBarnett.com I’m coming to Charlottetown, Prince Edward Island in January 2017. Seats are already filling up. Find all my live events here: http://davidbarnett.eventbrite.ca Thanks and I’ll see you next time.
Views: 24702 David Barnett
Right Share
 
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Right shares:- A rights issue is a dividend of subscription rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it is a non-dilutive pro rata way to raise capital. Rights issues are typically sold via a prospectus or prospectus supplement. With the issued rights, existing security-holders have the privilege to buy a specified number of new securities from the issuer at a specified price within a subscription period. In a public company, a rights issue is a form of public offering (different from most other types of public offering, where shares are issued to the general public). Rights issues may be particularly useful for all publicly traded companies as opposed to other more dilutive financing options. As equity issues are generally preferable to debt issues from the company's viewpoint, companies usually opt for a rights issue in order to minimize dilution and maximize the useful life of tax loss carry-forwards. Since in a rights offering there is a No Sale Theory and no change of control, companies are more able to preserve tax loss carry-forwards than via Follow On offerings or other more dilutive financings.
Views: 34428 eLearning Meridian
What is a Corporate Bond? How Do Corporate Bonds Work?
 
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What is a Corporate Bond? How Do Corporate Bonds Work? - Please take a moment to Like, Subscribe, and Comment on this video! View Our Channel To See More Helpful Finance Videos - https://www.youtube.com/user/FinanceWisdomForYou etf mutual funds hedge fund savings bonds bonds investment banking index funds surety bond mutual fund municipal bonds what is a mutual fund what is a bond cusip treasury bonds spdr best mutual funds hedge funds cusip lookup i bonds exchange traded funds bearer bonds gold etf junk bonds what is an etf what are bonds bonds definition treasury bills 10 year bond money market funds corporate bonds what is a surety bond saving bonds spy etf bond market government bonds biotech etf what are mutual funds top mutual funds etf screener types of bonds t bills stocks and bonds bond yield convertible bonds zero coupon bonds bond ratings zero coupon bond what is etf bond funds what are etfs high yield bonds russia etf bond rates tax free municipal bonds india etf silver etf best etf spdr etf reit etf bond prices what is mutual fund nasdaq etf treasury bond rates investing in bonds muni bonds emerging markets etf best etfs etf list natural gas etf treasury bond oil etf s&p 500 etf municipal bond bond etf treasury notes inverse etf leveraged etf best bond funds callable bond best mutual fund fidelity etf energy etf bond yields copper etf the bond buyer etf mutual funds hedge fund savings bonds bonds investment banking index funds surety bond mutual fund municipal bonds what is a mutual fund what is a bond cusip treasury bonds spdr best mutual funds hedge funds cusip lookup i bonds exchange traded funds bearer bonds gold etf junk bonds what is an etf what are bonds bonds definition treasury bills 10 year bond money market funds corporate bonds what is a surety bond saving bonds spy etf bond market government bonds biotech etf what are mutual funds top mutual funds etf screener types of bonds t bills stocks and bonds bond yield convertible bonds zero coupon bonds bond ratings zero coupon bond what is etf bond funds what are etfs high yield bonds russia etf bond rates tax free municipal bonds india etf silver etf best etf spdr etf reit etf bond prices what is mutual fund nasdaq etf treasury bond rates investing in bonds muni bonds emerging markets etf best etfs etf list natural gas etf treasury bond oil etf s&p 500 etf municipal bond bond etf treasury notes inverse etf leveraged etf best bond funds callable bond best mutual fund fidelity etf energy etf bond yields copper etf the bond buyer What is a Corporate Bond? How Do Corporate Bonds Work? Corporate bonds are issued in blocks of $1,000 in par value, and almost all have a standard coupon payment structure. Corporate bonds may also have call provisions to allow for early prepayment if prevailing rates change. Corporate bonds, i.e. debt financing, are a major source of capital for many businesses along with equity and bank loans/lines of credit. Generally speaking, a company needs to have some consistent earnings potential to be able to offer debt securities to the public at a favorable coupon rate. The higher a company's perceived credit quality, the easier it becomes to issue debt at low rates and issue higher amounts of debt. What is a Corporate Bond? How Do Corporate Bonds Work? Finance Wisdom For You Finance Wisdom For You Corporate bonds are issued as a way of raising money for businesses - it's essentially a certificate of debt issued by major companies When you buy bonds you are lending money to a company in exchange for an IOU. The IOU has a term and at maturity (typically five or ten years) the sum invested is returned in full. What is a Corporate Bond? How Do Corporate Bonds Work?
Issuance of Bonds Journal Entry - Lesson 3
 
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In the video, 11.03 - Issuance of Bonds Journal Entry – Lesson 3, Roger Philipp, CPA, CGMA, gives a full demonstration of the inner workings of the effective interest method for amortizing bond discount or bond premium. Working through the $1 million 10% yield, 8% coupon bond example, Roger first reviews the 5-step journal entry at issuance described in Lessons 1 and 2. Then he provides the steps for the effective interest method with a bond discount and then explains the steps for a bond premium, explaining the concepts and journal entries along the way. You will also learn to use the effective interest rate to calculate interest expense, and the coupon rate to calculate the cash payment, which is always the same. Interest expense changes with each coupon payment. As carrying value increases with a discount bond, interest expense increases. As carrying value decreases with a premium bond, interest expense decreases. Over the term of a discount bond the discount will be amortized until the carrying value is increased up to the face value of the bond. Over the term of a premium bond the premium will be amortized until the carrying value is decreased to the face value of the bond. Over the terms of both discount and premium bonds, the amortization amount of either the discount or premium increases over the life of the bond. Roger’s table and demonstration make these concepts and relationships very clear. Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Let’s go through, and what we're going to do, is we're going to go through and do our example that we did earlier, which is five year term bond, a million dollars, and we'll go through doing both of these discounted premiums. So the way percent stated, issued at 10. Eight percent stated, issued at six. And then we'll go through, and do the effective interest table. Now, my numbers aren't going to be exact, because I kind of want to make it a little bit easier for me to get through the calculations. But you'll see how it works. So we're going to set up our amortization table, which has the face, plus or minus, and we're going to have plus or minus our premium, or discount, that equals your carrying value. Times, the effective interest rate.
Views: 6345 Roger CPA Review
What Are The Primary Differences Between Stocks And Bonds
 
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Difference between stocks and bonds? bonds vs youtube. Bonds are always considered and regulated as securities, while notes. Stocks offer an ownership 17 jul 2013 what's the difference between a stock, bond and mutual fund? Generally bonds are less risky than stocks main way you lose 22 feb 2017 investing isn't as hard most people think, but there's lot of jargon to learn. A bond and a share of stock are very different in their structure as investments, safety, use, availability price. Difference between stocks and bonds (with comparison chart what are the major differences shares bonds? Quora. Googleusercontent search. Difference between stocks and bonds? The balance thebalance the difference bonds 417069 url? Q webcache. While investing in stocks gives 16 may 2012 stock and a bond then explain the key differences between two main reason why investors become involved with these what's difference stock? Stocks bonds are classes of assets use their portfolios. What is the difference between stocks and bonds? bond market stock market? . Econ explains differences between debt and equity markets. What is the main difference between a bond and share of stock? investors in mutual funds own shares fund that may hold stocks, bonds or other one stocks rank priority dr. What is the difference between stocks and bonds? Stocks vs bonds comparison what's a stock, bond mutual fund lifehacker two cents. Stocks and bonds represent two different ways for an entity to raise money fund or expand their operations. Bonds are a form of long term debt in which the issuing corporation promises to pay principal amount at specific date bond market is where investors go trade (buy and sell) securities, one major difference between both markets that stock has central 4 dec 2015 basic stocks bonds financial asset holds ownership rights, issued by company known as when it's about investment, have some options invest different kinds securities like stocks, or funds. Let me to save and finance major purchases (such as houses, cars, appliances, give a few examples) the primary difference between notes payable bonds stems from securities laws. When you buy bonds, choosing what type of investments to include in a stock portfolio can be challenging for understanding the differences between bonds and equity, or stocks, help is main difference bond share stock? . When a company issues stock, it is selling piece of itself in exchange for cash. There are important differences between stocks and bonds. The difference between stocks & bonds mutual funds what are the differences debt and equity is a bond vs. Difference between stocks and bonds accountingtools. Stocks are ownership stakes, bonds debt. What is the main difference between a bond and share of stock what bonds & equity in portfolio bonds, debentures shares budgeting money. Stocks and bonds are two common terms that come to mind stocks is a pairing nearly as familiar peanut butter jelly. Difference between stocks and bonds? The
Views: 12 new sparky
Municipal bonds
 
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Municipal bonds Municipal bonds are good for high income people Although investing in foreign bonds isn't a great idea for anyone, investing in municipal bonds may be a good idea for some people. If you have a fairly high income, you should take a look into investing into municipal bonds. Almost all municipal bonds are exempt from federal income tax, and most municipal bonds issued in your state also are exempt from state income taxes. However, only the interest income is exempt from taxation. If you sell a municipal bond, or bond fund, at a gain, you'll have to pay capital gains taxes. If you're in the 28 percent marginal tax bracket, municipal bonds are probably worth a look. If you're in the 31 percent marginal tax bracket, municipal bonds are certainly worth investigating. However, since municipal bonds are exempt from federal income tax, these bonds will offer a yield that is lower than the more creditworthy US Treasury bonds. To determine if investing in municipal bonds is right for you, you need to compare the after-tax yields of munis with taxable bonds of comparable credit quality. How to tell if you should invest in municipal bonds Suppose blue chip corporate bonds are yielding 10 percent, and municipal bonds yield only 8 percent. If you're in the 15 percent marginal tax bracket, the corporate bonds will provide a higher after-tax yield. However, if you're in the 28 percent or higher bracket, the municipal bonds provide a higher after-tax return. And remember that municipal bond funds come in all different maturities including money market funds. Never put municipal bonds in a retirement account Notice that you should never invest in municipal bonds inside of a retirement account. Retirement accounts already provide tax sheltering, so go for the higher yield provided by something like a corporate bond instead of the lower municipal yield. Also, if you're investing in municipal bonds, keep an eye on tax reform legislation. Tax reform packages offered by both Republicans and Democrats would end the tax exempt status for municipal bonds. If these tax reform packages became law, municipal bond prices will drop. Don't invest in most double exempt muni bond funds Finally, should you invest in a so-called double-exempt municipal bond fund? The answer is usually no. These funds invest in municipal bonds issued by a single state. For example, California investors might want to invest in a California double-exempt fund that invests only in California municipal bonds. This way, the interest income earned by the California investor is exempt from federal income tax and California state income tax. This makes the after-tax yield even better for a California investor. Almost every state has double-exempt bond funds. Even states that have no state income tax for some reason have double-exempt bond funds. However, most of these funds should be avoided. The problem with most of these funds is that their fees are too high. A typical double-exempt bond fund charges a sales load of 5 percent and has an expense ratio of well over 1 percent. However, if you live in a big state with high tax rates like California or New York, you probably can find a bond fund that is both double-exempt for your state and has low costs. The Vanguard mutual fund family is usually the place to look for these kind of funds. Insured municipal bonds There are several levels of credit risk in municipal bonds. Conservative investors can invest in insured municipals where an insurance company will assume the local government's obligations if the local government goes bankrupt. This insurance comes at a price, generally in the form of reduced yield. General obligation bonds Uninsured general obligation municipal bonds aren't as safe as insured municipals, but they are generally good credit risks. General obligation bonds are backed by the local government's full taxing authority. With GO bonds, the local government has the obligation to raise taxes to meet the debt payments. Revenue bonds Revenue bonds are another form of municipal bond. In this case the municipality doesn't guarantee that the local government will be liable for the debt. Revenue bonds typically are issued to pay for new sewers, stadiums or airports. The water department or stadium collects usage fees, and these fees are used to pay off the debt. If the usage fees aren't sufficient to pay off the debt's obligations, the government isn't on the hook to make up the difference. Revenue bonds for essential services like sewage are probably safer investments than bonds used to finance things like stadiums or convention centers. Copyright 1997 by David Luhman
Views: 1580 MoneyHop.com
Stocks vs Bonds
 
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A preferred stock is generally considered between to a bond and common stock in the sense that it pays fixed dividends like a bond but takes lower precedence than a bond in case of liquidation proceedings. -- Similarities:-- Interest rate sensitivity: Both bonds and preferred stocks prices fall when interest rates rise because the future cash flows are discounted at a higher rate and offer a better dividend yield. The opposite is true when interest rates fall. Callability: Both securities may have an embedded call option (making them "callable") that gives the issuer the right to call back the security in case of a fall in interest rates and issue fresh securities at a lower rate. This not only caps the investor’s upside potential but also poses the problem of reinvestment risk. (For more, see: Callable Bonds: Leading A Double Life.) Voting rights: Neither security offers the holder voting rights in the company. Capital appreciation: There is very limited scope for capital appreciation for these instruments as they have a fixed payment that does not benefit them from the firm’s future growth. Convertibility: This option allows investors to convert either security into a fixed number of shares of the common stock of the company, which allows them to participate in the firm’s future growth. --Differences:-- Seniority: As discussed above, both bonds and preferred stocks are senior to common stock, but bonds take precedence over preferred stocks in bankruptcy proceedings. Whereas interest payments on bonds are legal obligations and are payable before tax payments, dividends on preferred stocks are after-tax payments and are not made if the company is facing financial difficulties. Any missed dividend payment may or may not be payable in the future depending on whether the security is cumulative or non-cumulative. Risk: Generally, preferred stocks are rated two notches below bonds with regards to risk to account for the lower claim on assets of the company. Yield: Preferred stocks have a higher yield than bonds to compensate for the higher risk. Par value: Preferred stocks generally have a lower par value than bonds, thereby requiring a lower investment. Both are usually issued at par. -》Bonds or Preferred Stocks? Institutional investors like preferred stocks due to the preferential tax treatment the dividends receive. This may suppress yields, which is a negative for individual investors. The very fact that companies are raising capital through preferred stocks could signal that the company is loaded with debt, which may also pose legal limitations on the amount of additional debt it can raise. Companies in the financial and utilities sectors mostly issue preferred stocks, leading to a lack of diversification. The Bottom Line The high yield of preferred stocks is definitely a positive, and in today’s low interest rate environment they can definitely add value to a portfolio. Adequate research needs to be done about the financial position of the company, however, or investors may suffer losses. Another option is to invest in a mutual fund that invests in preferred stocks of various companies. This gives the dual benefit of a high dividend yield and risk diversification.
Views: 201 Ch. Hardeep Singh
10. Debt Markets: Term Structure
 
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Financial Markets (ECON 252) The markets for debt, both public and private far exceed the entire stock market in value and importance. The U.S. Treasury issues debt of various maturities through auctions, which are open only to authorized buyers. Corporations issue debt with investment banks as intermediaries. The interest rates are not set by the Treasury, the corporations or the investment bankers, but are determined by the market, reflecting economic forces about which there are a number of theories. The real and nominal rates and the coupons of a bond determine its price in the market. The term structure, which is the plot of yield-to-maturity against time-to-maturity indicates the value of time for points in the future. Forward rates are the future spot rates that can be calculated using today's bond prices. Finally, indexed bonds, which are indexed to inflation, offer the safest asset of all and their price reveals a fundamental economic indicator, the real interest rate. 00:00 - Chapter 1. Introduction 04:25 - Chapter 2. The Discount and Investment Rates 19:12 - Chapter 3. The Bid-Ask Spread and Murdoch's Wall Street Journal 29:17 - Chapter 4. Defining Bonds and the Pricing Formula 39:38 - Chapter 5. Derivation of the Term Structure of Interest Rates 52:34 - Chapter 6. Lord John Hicks's Forward Rates: Derivation and Calculations 01:06:09 - Chapter 7. Inflation and Interest Rates Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses This course was recorded in Spring 2008.
Views: 51070 YaleCourses
Bond Basics
 
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What is a bond? When you buy a bond, your are essentially loaning money to the entity that issued that bond (bank, insurance company, major corporation, etc.) Typically, they have a maturity date. Long term bonds, with longer maturity dates tend to have higher rates of return. Copyright © 2010 Principal Truth Broadcasting, Inc. - No materials may be used without permission
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What Is A Bond In Accounting?
 
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Accounting for bonds payable principlesofaccounting. We will look at a similar topic but this time we, as corporation, are purchasing bonds of another company. Bond (finance) wikipedia. 12 may 2017 there are many types of bonds that can be issued, each of which is tailored to the specific needs of either the issuer or investors. Googleusercontent search. When an organization issues bonds, investors 4 jul 2017 when the stated interest rate associated with a bond is lower than market on date sold, will only definition of debt instrument issued for period more one year purpose raising capital by borrowing. Bonds payable what is a bond? . The most as an example, after accounting scandal and a chapter 11 bankruptcy at the giant telecommunications company worldcom, in 2004 its face amount of bonds is with stated interest rate (coupon rate) 10a bond payable promise to pay series payments over time fixed maturity. Accounting bonds (part i) youtube. There are several business definitions for bond. Accounting for bonds payable requires present value accounting investment in. The federal in finance, bonds are a form of debt the creditor is bond holder, accounting interest on bonds, or coupon payments, normally payable fixed bond, also known as income security, instrument created for purpose raising capital. Accountingcoach accountingcoach blog what is a bond class "" url? Q webcache. The corporation issuing the bond is borrowing money from an investor who becomes a lender and bondholder. Bonds payable what is a bond? Accountingcoachexample my accounting coursewhat Definition and meaning businessdictionary. Amortization of discount on bonds payable accountingtoolswhat is a bond? Definition and meaning investor wordsbond definition & example convertible in accounting examples. Accounting for bonds payable accountinginfo. Accounting for investment in bonds introduction to (video) types of accountingtools. A bond could be a formal debt instrument issued by corporation or government and purchased investors bonds are form of long term. All documented in finance, a bond is an instrument of indebtedness the issuer to holders. We will not have 28 sep 2013. They are essentially loan agreements between the convertible bonds a special type of bond that gives owner option to trade for certain amount stock in companyBonds payable what is bond? Accountingcoachexample my accounting coursewhat Definition and meaning businessdictionary. You might think of a bond as an iou issued by corporation and purchased investor for cash. The principal or face amount on the bond's maturity date a bond is written agreement contract between an issuer and holder that requires to pay par value plus debt investment in which investor loans money entity (typically corporate governmental) borrows funds for defined period of time at variable fixed interest rate definition signed promise certain sum date, fulfillment specified condition. The large 26 dec 2010 when a company issues bonds, investo
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Services for Surety Bonds | Best Surety Bond Service
 
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Services for Surety Bonds Visit us at https://Swiftbonds.com for all your surety bond Requirements. Our specialists will help you find the surety bond that best fits your situation. Learn all the ins and outs of bond negotiations at our website. ---------------------------------------- CLICK HERE: https://swiftbonds.com/ ---------------------------------------- More Information about what is a surety bond service: See video #2 in playlist: https://www.youtube.com/playlist?list=PLOr1J6ZDX2IbyXw6JLngu3XQVHlso-uub video 2: https://youtu.be/mKevMZd1byk A surety bond service is one that is able to find your business a surety bond that fits into your business. The best surety bond service companies utilize a variety of surety companies that they will use to write your bond. As you can believe, surety bonds companies can have different criteria. For example, we utilize some surety bond companies that like to write bonds based upon working capital. Others like to have plenty of assets Cash flow is always important to these sureties. There are also companies that will write surety bonds for companies with less than desirable credit. We work with our companies to provide the bonds that best meet their needs. We approach our sureties that we believe will best write the bonds. We also work with our clients to re-cast financials so that they can get their bond. Surety bond - Wikipedia https://en.wikipedia.org/wiki/Surety_bond Jump to Business service bonds - A surety bond or surety is a promise by a surety or guarantor to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. Performance bond - Wikipedia https://en.wikipedia.org/wiki/Performance_bond Performance bond. From Wikipedia, the free encyclopedia. Jump to: navigation, search. A performance bond, also known as a contract bond, is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. Surety - Wikipedia https://en.wikipedia.org/wiki/Surety In finance, a surety, surety bond or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower ... Missing: service Bid bond - Wikipedia https://en.wikipedia.org/wiki/Bid_bond A bid bond is issued as part of a supply bidding process by the contractor to the project owner, ... bond assures and guarantees that should the bidder be successful, the bidder will execute the contract and provide the required surety bonds. Bond insurance - Wikipedia https://en.wikipedia.org/wiki/Bond_insurance Bond insurance is a type of insurance whereby an insurance company guarantees scheduled .... By order of the New York State Insurance Department, FGIC ceased p ---------------------------------------- CLICK HERE: https://swiftbonds.com/ ---------------------------------------- Index of video content: https://youtu.be/9Im1Cja6-3U ---------------------------------------- FOR MORE DETAILS: https://swiftbonds.com/contract-bond ------------------------------------------- CONNECT WITH US: https://www.facebook.com/swiftbonds https://twitter.com/swiftbonds https://plus.google.com/+SwiftbondsOverlandPark/about http://swiftbonds1.blogspot.com https://www.diigo.com/profile/Swiftbonds http://suretybond1.weebly.com/ ------------------------------------------ Don't forget to check out our YouTube Channel: https://www.youtube.com/channel/UCcBRQemaJLahElJQueyLP_Q and click the link below to subscribe to our channel and get informed when we add new content: https://www.youtube.com/channel/UCcBRQemaJLahElJQueyLP_Q?sub_confirmation=1 -------------------------------------------- VISIT OUR SITE: https://www.swiftbonds.com
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