How is convertible bond valuation different than traditional bond valuation?

July 7, 2024 No Comments

A: Convertible bonds have features of equity securities since they can be conditionally converted into shares. This makes them more sensitive to company-specific news and less sensitive to systematic economic conditions, at least when compared with traditional bonds. The valuation of a convertible bond must

How is convertible bond valuation different than traditional bond valuation?

July 8, 2024 No Comments

How Is Par Value Affected When a Bond Price Falls?

June 30, 2024 No Comments

A: When you buy a bond, you are loaning money to the issuer. Since a bond is a loan, the interest paid to the bondholder is payment for lending the money. The interest payable is stated as a percentage of the amount borrowed, known as the

How Is Par Value Affected When a Bond Price Falls?

July 7, 2024 No Comments

How Is Par Value Affected When a Bond Price Falls?

July 7, 2024 No Comments

How is the interest rate on a treasury bond determined?

June 30, 2024 No Comments

A: The yield of U.S. Treasury securities, including Treasury bonds (T-bonds), depends on three factors: the face value of the security, how much the security was purchased for and how long it is until the maturity of the security. Many external factors influence Treasury prices

How is the interest rate on a treasury bond determined?

July 7, 2024 No Comments

How is the interest rate on a treasury bond determined?

July 7, 2024 No Comments

How is the interest rate on a treasury bond determined?

July 8, 2024 No Comments

How is the risk-free rate determined when calculating market risk premium?

June 30, 2024 No Comments

A: The risk-free rate is the rate of return of an investment with no risk of loss. Most often, either the current Treasury bill, or T-bill, rate or long-term government bond yield are used as the risk-free rate. T-bills are considered nearly free of default

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