Corporate Finance
12th Edition
ISBN: 9781259918940
Author: Ross, Stephen A.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 15, Problem 1CQ
Bond Features What are the main features of a corporate bond that would be listed in the indenture?
Expert Solution & Answer
Summary Introduction
To determine: The main characteristics of a corporate bond that can be listed in the indenture.
Introduction: Corporate bond is a security debt issued by a company and sold to investors. The interest rates are higher in the corporate bonds, and risk is higher than the government bonds.
Explanation of Solution
The following are the important features of corporate bonds that are listed in the indenture:
The indenture is a lawful agreement and can go up to 100 pages. The bond features will include,
- Basic terms and conditions of bonds,
- Total number of the bonds issued,
- Information regarding property utilized as a collateral
- Call provision
- Agreement on repayment
- Details regarding covenants protection
- Convertibility provision
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Chapter 15 Solutions
Corporate Finance
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