A research on an asset Case Study Example | Topics and Well Written Essays - 2500 words

A research on an asset - Case Study ExampleSince 1961, however, banks have issued negotiable CDs. They straight off are traded actively in a secondary money market.Corporations can evidence funds by issuing stock or selling bonds. cable equities are shares of ownership, such as stock that corporations issue. Owners of equities are residual claimants on the income and the net worth of a corporation. The equity holders of a company are paid after all the debts of a company is paid. The significant characteristic of equities is the variation of returns with the profitability of the company. An investor can become the owner of a corporation by buying the equity. The edge of bonds on equity is that if the company goes bankrupt the bond holder will be paid before shareholder on the other slip by the profitability of the company doesnt benefit much to the bond holder as a bond holder will only get principal improver interest. Hence the ownership of bonds involves low risk as compare t o the ownership of stocks, but this comes at the cost of a lower return.Corporate bonds Corporations can raise funds by issuing corporate bonds. A Corporate Bond is a long term instrument yielding interest twice apiece year until the date of maturity. Convertible bonds can be converted into equity shares before the maturity. The corporations offer the convertibility peculiarity with the bonds in order to attract investors. Another feature which increases the attractiveness of bonds is their degree of liquidity which they provide the investors as compare to the equities. The high liquidity of bonds is due to their trading in the secondary markets. In order to throw out the secondary market trading the Corporations must maintain higher credit ratings.Bonds reduce the short term volatility of the stock market. The perception that the stocks yield higher returns as compare to bonds is true for the period of 10 years or more. Bonds are suitable for the investors who cannot bear the vo latile