• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint

Corporate Bonds

When corporations require capital, they can either borrow money or seek additional equity investors. The route that a business takes may be dictated by any number of factors, including the company's debt rating, the interest rate environment, and the general market for equity issues, to name a few. When companies go to the public for debt financing, they typically range from intermediate-term to long-term bond offerings. In the case of Disney, it floated a 100-year corporate bond, and only Disney could make that happen.

The interest rate yields on corporate bonds are higher than on government bonds and municipal bonds because the credit risk is greater and because the interest is taxable. To help you determine if owning a taxable bond will work in your favor, you'll need to calculate the equivalent yield by converting corporate yields to tax-free yields.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint