Question

Outline the key features of a corporate bond

Answer 1

Key Features of Corporate Bonds.
1. Maturity- The amount of time it's takes for the bond to redeemed.
2. It has a -Yield to maturity: Effective interest rate earned by the bondholders.
3. Coupon rate: The % of face value paid as Interest to the bondholders. coupon amount is paid during the life of the bond.
4. Face Value: The amount paid during the maturity on redemption.
5. Coupon Payment frequency: How often the coupon amount is paid- Annually, Semi-annually, quarterly etc.
6. Rating: The Quality of the Bond as rated by the credit rating Agency.
7. Issuer: The firm which raise the money by issuing the bonds.
8. They generally secured by attachment of the assets.