Chapter 20 Long-Term Debt, Preferred stock, and Common Stock 20-1
20-1 Chapter 20 Long-Term Debt, Preferred Stock, and Common Stock
Long-Term Debt, Preferred Stock and common Stock Bonds and their features Types of Long-Term Debt Instruments Retirement of bonds Preferred stock and its Features Rights of common shareholders Dual-class common stock 20-2
20-2 Long-Term Debt, Preferred Stock, and Common Stock Bonds and Their Features Types of Long-Term Debt Instruments Retirement of Bonds Preferred Stock and Its Features Rights of Common Shareholders Dual-Class Common Stock
Bonds and their Features Bond -A long-term debt instrument with a final maturity generally being 10 years or more. Basic Terms Par value Coupon Rate Maturity Bond Ratings 20-3
20-3 Bonds and Their Features Basic Terms Par Value Coupon Rate Maturity Bond Ratings Bond -- A long-term debt instrument with a final maturity generally being 10 years or more
Trustee and Indenture Trustee -A person or institution designated by a bond issuer as the official representative of the bondholders. Typically, a bank serves as trustee Indenture The legal agreement also called the deed of trust, between the corporation issuing bonds and the bondholders, establishing the terms of the bond issue and naming the trustee. 20-4
20-4 Trustee and Indenture Trustee -- A person or institution designated by a bond issuer as the official representative of the bondholders. Typically, a bank serves as trustee. Indenture -- The legal agreement, also called the deed of trust, between the corporation issuing bonds and the bondholders, establishing the terms of the bond issue and naming the trustee
Types of Long-Term Debt instruments Debenture -A long-term, unsecured debt instrument Investors look to the earning power of the firm as their primary security Investors receive some protection by the restrictions imposed in the bond indenture particularly any negative-pledge clause A negative-pledge clause precludes the corporation from pledging any of its assets(not already pledged)to other creditors. 20-5
20-5 Types of Long-Term Debt Instruments Investors look to the earning power of the firm as their primary security. Investors receive some protection by the restrictions imposed in the bond indenture, particularly any negative-pledge clause. A negative-pledge clause precludes the corporation from pledging any of its assets (not already pledged) to other creditors. Debenture -- A long-term, unsecured debt instrument