Purchase Solution

Why are bondholders similar to bankers?

Not what you're looking for?

Ask Custom Question

Why are bondholders similar to bankers?

Purchase this Solution
Solution Summary

I have discussed the similarities and differences between traditional bank loans and bonds and given you an excel sheet with the two types of loan contrasted (made up some numbers to show you a visual).

Solution Preview

Firms that issue bonds are "getting a loan" from bondholders. They borrow money from the first bondholders and are required to pay interest and repay the principal at maturity to the owner of the bonds on the various payment dates. While bondholders may change hands, the firm that issued the bonds is ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

View More Free Quizzes
Related BrainMass Solutions

  • Are ratios that Bankers and Bondholders want similar if so why

    385052 Are ratios that Bankers and Bondholders want similar if so why Please comment for the following questions: 1. Are ratios that Bankers and Bondholders want similar if so why? 2.

  • Define ratio analysis and its limitations

    Managers used ratio analysis to help analyze, and control with the intent to improve the company's operations. Credit analysts (bankers and bondholders) analyze ratios to help judge a company's ability to pay its debts.

  • Financial Ratios Identified

    Bankers. Bondholders. Managers.

  • What types of features can bonds carry which make them more

    One of the main reasons why bonds are generally more attractive compared to other financial instruments is because bonds are safer than other investments.

  • Cash dividends or stock dividends

    Why did Akin & Gump organize as a corporation if a corporation must pay an additional layer of income tax? 2. How is preferred stock similar to common stock? How is preferred stock similar to debit? 3.

  • Sinking Fund

    Also if the interest rates fall, then bondholders are better off with the company investing in government securities since the bonds are not called. Option b has the benefit that if interest rates are to rise.

  • Protection of Bondholders' Claim

    397615 Protection of Bondholders' Claim If you were in a position to remake the financial world: Why would or wouldn't you have the bondholders' claim be protected to the possible detriment of the shareholders' claim?

  • This post addresses remaking the financial world.

    If you were in a position to remake the financial world: Why would or wouldn't you have the bondholders' claim be protected to the possible detriment of the shareholders' claim?

  • investment banking

    "Here are some of the most important characteristics to look for when choosing investment bankers: Relationship - Relationships are built on trust, and a relationship with an investment banker is no exception.

View More Related Solutions