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FIN 301 - Ch. 7
Bonds and Bond Valuation
15
Finance
Undergraduate 3
10/03/2018

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Cards

Term
Coupon
Definition

The stated interest payment made on a bond.

Term
Face Value
Definition

The principle amount of a bond that is repaid at the end of the term. (Also called par value)

Term
Coupon Rate
Definition

The annual coupon divided by the face value of a bond

Term
Maturity
Definition

The specified date on which the principle amount of a bond is paid

Term
Yield to Maturity (YTM)
Definition

The rate required in the market on a bond

Term
Current Yield
Definition
A bond's annual coupon divided by its price.
Term
Indenture
Definition

The written agreement between the corporation and the lender detailing the terms of the debt issue.

Term
FormRegistered
Definition

The form of bond issue in which the registrar of the company records ownership of each bond; payment is made directly to th owner of record

Term
Bearer Form
Definition
The form of bond issue in which the bond is issued without record of the owner's name; payment is made to whomever holds the bond.
Term
Debenture
Definition
An unsecured debt, usually with a maturity of 10 years or more
Term
Note
Definition
An unsecured debt, usually with a maturity under 10 years
Term
Sinking Fund
Definition

An account managed by the bond trustee for early bond

Term
Call Provision
Definition

An agreement giving the corporation the option to repurchase a bond at a specified price prior to maturity

Term
Call Premium
Definition
The amount by which the call price exceeds the par value of a bond.
Term
Deferred Call Provision
Definition
A call provision prohibiting the company from redeeming a bond prior to a certain date.
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