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 now are traded actively in a secondary money market.Corporations can raise funds by result stock or selling bonds. Business equities are shares of ownership, such as stock that mints issue. Owners of equities are residual claimants on the income and the clear 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 purchasing the equity. The edge of bonds on equity is that if the company goes bankrupt the bond holder go forth be paid earlier shareholder on the other hand the profitability of the company doesnt acquire much to the bond holder as a bond holder will only jump principal plus kindle. Hence the ownership of bonds involves low risk as compare to the owners hip of stocks, solely 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 each year until the date of maturity. Convertible bonds can be converted into equity shares before the maturity. The corporations offer the convertibility feature with the bonds in order to attract investors. Another feature which increases the attractiveness of bonds is their degree of liquidness which they provide the investors as compare to the equities. The higher liquidity of bonds is due to their trading in the secondary markets. In order to encourage the secondary market trading the Corporations must maintain higher credit ratings.Bonds dress the short term volatility of the stock market. The perception that the stocks yield higher returns as compare to bonds is genuine for the period of 10 years or more. Bonds are suitable for the investors who cannot bear the volatile