Chapter 11
Bonding Over Business
IN THIS CHAPTER
Looking at various types of bonds
Exploring fixed- and floating-rate bonds
Understanding bond terminology
Checking out some bond valuation equations
Bonds are popular among both corporations and investors. Corporations appreciate the fact that bonds don’t dilute the value of equity the way issuing additional shares of stock does. And investors feel they’re less volatile than stocks with guaranteed returns. Still, most bonds have a fixed return, making them particularly attractive for investors seeking stability, such as those who are funding retirement accounts.
In this chapter, you explore the different types of bonds available and their various issuing institutions. You also discover the differences between fixed- and floating-rate bonds. I show you how to read about bonds and keep up on changes in bond valuations. Finally, a beginner’s guide to estimating the valuation and pricing of bonds helps you determine your corporation’s potential for raising money through debt and whether a particular bond is an attractive investment for ...
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