2. Characteristics of bonds To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: A bond's refers to the interest payment or payments paid by a bond. A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants. A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a A bond's allows a bondholder or preferred stockholder to convert their bond or preferred share, respectively, into a specified number or value of common shares. Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information: Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00 What is the issuing date of this bond? O 7-15-2005 7-15-2055 If the price of the bond is initially discounted and offers no coupon payments, the bond is called a bond. The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called the Issuers can gradually reduce the outstanding balance of a bond issue by using a sinking fund account into which they deposit a specified amount of money each year. To operationalize the sinking fund provision of an indenture, issuers can (1) purchase a portion of the debt in the open market or (2) call the bonds if they contain a call provision. Issuers can gradually reduce the outstanding balance of a bond issue by using a sinking fund account into which they deposit a specified amount of money each year. To operationalize the sinking fund provision of an indenture, issuers can (1) purchase a portion of the debt in the open market or (2) call the bonds if they contain a call provision. Under what circumstances would a firm be more likely to buy the required number of bonds in the open market as opposed to using one of the other procedures? O When interest rates are higher than they were when the bonds were issued When interest rates are lower than they were when the bonds were issued Grade It Now Save & Continue Continue without saving For example: A bond's refers to the interest payment or payments paid by a bond. A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one he issue's restrictive covenants. liquidation A bond contract feature that suer to retire a specified portion of the bond issue each year is called a A bond's bankruptcy bws a bondholder or preferred stockholder to convert their bond or preferred share, respectively, into a specified number or value of default Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information: For example: A bond's refers to the interest payment or payments paid by a bond. A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants. A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a A bond's allows a bondholder or preferred stockholder to convert their bond or pref into a convertible provision specified number or value of common shares. sinking fund provision Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following infor call provision Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00 For example: A bond's refers to the interest payment or payments paid by a bond. A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants. A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a A bond's allows a bondholder or preferred stockholder to convert their bond or preferred share, respectively, into a specified non shares. call premium Suppose yo e Golden Gate Bridge and Highway District bonds. It includes the following information: 1 vision convertibility provision Bridge Bonds Series A Dated 7-15-2005 4.375% Due 7-15-2055 @100.00 What is the issuing date of this bond? 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