What do stockholders have claim on? What are Stocks? http://www.investopedia.com/video/play/what-are-stocks Definition of a stock? What do stockholders have claim on? What assets are mentioned in the video? What major stock exchanges are mentioned in the video clip?
BONDS
Bonds What? Who? Why?
What? Who? Why? borrowing/lending: face value (principal) coupon (interest rate) bond issuers governments (government bonds) companies (corporate bonds) bondholders -individuals & institutional investors -selling or holding bonds until maturity
Introduction to Bonds http://www. investopedia A bond is a (1)... instrument issued by governments, corporations or other entities. It is a loan that (2)... make to the bond issuer. The (3)... of a bond when it’s first issued is the amount of money being loaned, and it is referred to as the bond’s face value. Investors receive (4)... known as bond coupon. Bonds have different (5)... (e.g. 1year, 3 years or 30 years) after which the bond issuer (6)... the loan to the investor.
Read MK.p.81 Make questions so that the underlined parts of the text represent their answers.
Debt Financing vs. Equity Financing MK, p.81 BONDS FOR INVESTORS FOR ISSUERS ADVANTAGE DISADVANTAGE
More about bonds (MK, p.81) Meaning of T-notes, T-bonds and gilts? Who are market makers? Bid vs. offer price? What is a spread? What is inversely related? What does the yield of a bond depend on?
Introduction to Bonds (video) http://www. investopedia Definition of bonds? Term used for the price of a bond on the primary market? Maturities mentioned? Coupons mentioned? Why do corporations/governments issue bonds? What is important to remember about bonds?
Nakon kredita nove obveznice za 200 m kuna (Source: JL, p Nakon kredita nove obveznice za 200 m kuna (Source: JL, p.26, 19 May 2016, print edition) bond issue repay face value (nominal value) operating capital (working capital) maturity European Bank for Reconstruction and Development (EBRD) International Finance Corporation (IFC) pension fund agent, underwriter revenue EBIT exchange rate
Nakon kredita nove obveznice za 200 m kuna (Source: JL, p Nakon kredita nove obveznice za 200 m kuna (Source: JL, p.26, 19 May 2016, print edition) What does Atlantic Group intend to do? Why? What sources of finance has AG used so far? What changes have been brought by the new financial arrangements agreed earlier this May? How did AG perform in Q1 this year? What was this mostly due to?
Text headings: Corporate finance Stocks vs. Bonds Bond risks REVISION The Financing of Corporate Activity (RB) Based on: McConnell, C.R., Brue, S.L. (1996). Economics. McGraw-Hill Inc. Text headings: Corporate finance Stocks vs. Bonds Bond risks
Features of well-organized writing: Topic sentences Paragraphing: The Financing of Corporate Activity Based on: McConnell, C.R., Brue, S.L. (1996). Economics. McGraw-Hill Inc. Features of well-organized writing: Topic sentences Paragraphing: 1 pg.=1 idea =1 heading 3. Linking words (e.g. connectors, ….)
CORPORATE FINANCE Full text: Generally speaking, ...... three different ways... First, ..., Second, ..., For example, ...Third,... Notes: THREE WAYS OF CORPORATE FINANCE: 1. 2. .... (e.g. ...) 3.
STOCKS VS. BONDS Full text: In contrast, ..., For example, ... This means that... There are clearly important differences between..., First,... Second,..., On the one hand,..., On the other, .... Notes: STOCKS vs. BONDS -ownership -lending -less risky: 1. 2.
Bond risks Full text: clear paragraphing & topic sentences Notes: CORPORATE BOND RISKS 1. 2. 3.
Stocks vs. Bonds (video ex. ) http://www. investopedia Stocks and bonds are the two biggest 1… of most 2 … . Stocks usually provide a steady 3…, and bonds tend to ensure a 4…. . Bonds can be bought from 5…, and a careful selection of stocks will include 6… . A combination of stocks and bonds is good for all kinds of investors. For aggressive investors, bonds may 7... the risk of stocks and stabilize the 8… of the market, while stocks can help 9…. investors 10… against the risk of inflation.