Finance Chapter 6 and 7 terms and important things

a level stream of cash flows for a fixed period of time

an annuity for which the cash flows occur at the beginning of the period

an annuity in which the cash flows continue forever

a type of perpetuity

the interest rate expressed in terms of the interest payment made each period. Also known as the quoted intersted rate

the interest rate expressed as if it were compounded once per year

the interst rate charged per period mulitplied by the number of periods per year

the stated interst payment made on a bond

the principal amount of a bond that is repaid at the end of the term also called par value

the annual couopon divided by the face value of a bond

the specified date on which the principal amount of a bond is paid

the reate required in the market on a bond

a bond's annual coupon divided by its price

the written agreement between the corporation and the lender detailing the terms of the debt issue

the form of bond issue in which the registrar of the company records ownership of each bond: payment is made directly to the owner of record

the form of bond issue in which the bond is issued without record of the owner's name: payment is made to whomeever holds the bond

an unsecured debt, usually with a maturity of 10 years or more

an unsecured debt, usually with a maturity under 10 years

n acount managed by the bond trustee for early bond redemption

an agreeement giving the corporation and option to repurchase a bond at a specified price prior to maturity

a call provision prohibiting the company from redeeming a bond prior to a certain date

a bond that, during a certain period, cannot be redeemed by the issuer

a part of the indenture limiting certain actions that might be taken during the term of the loan, usualy to protect the lender's interest.

a bond that makes no coupon payment and is thus initually priced at a deep discount

the price a dealer is willing to pay for a security