EDU Articles
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What is an Income Bond?
Income bonds are issued by companies and they will only pay a coupon or interest rate if the company generates adequate earnings to do so.
Non-payment of a coupon or interest rate does not necessarily mean that the company is in default. The principal amount plus some interest is due to the bondholder at maturity. Income bonds are sometimes issued by companies who are experiencing hard times and cannot guarantee a coupon payment to bondholders.
They use it to raise capital by borrowing from investors, and investors might be willing to take a chance on the company if they feel that they could turn things around soon, which could result in a significant yield being paid. Bonds with a credit rating below the B tier are considered highly speculative, and are sometimes called junk bonds, or high yield bonds.
If the company goes bankrupt, bondholders are still near the top of the list of those who will be paid from the assets that exist. At maturity, the bondholder will be entitled to the principal amount plus a certain amount of interest. If the bond was a cumulative one, any coupon payments that were not paid during the life of the bond will be due upon maturity.
It is worth knowing that income bonds are very rarely used.
How do I Choose an ETF?
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What Payout Options Do I Have?
Payout options in the realm of annuities tend to be guaranteed by the insurance company providing the annuity
Where Do I Buy Life Insurance?
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Do I Need a Will?
Yes, generally speaking any person that has assets and liabilities needs a will. In the absence of a will, a deceased...
What is Corporate Equity?
Corporate equity is retained earnings plus common shares outstanding
What is Net Present Value?
Net Present Value (NPV) is the difference between present value of net inflows versus the present value of outflows
What is GAAP?
GAAP are the accounting principles which must be followed by publicly traded corporations and are widely used elsewhere
What are some Examples of Chart Patterns?
Chart patterns are shapes that sometimes appear in the charts of securities prices. Some include Head-and-Shoulders
What are Fibonacci Channels?
Fibonacci Channels use Fibonacci numbers and proportions to define possible places where reversals will occur
What was the Mt. Gox Incident?
There have been many incidents where cryptocurrency has been stolen, but the Mt. Gox incident is the largest to date