Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Solutions to agency problem
The bondholders might receive the following procedures to protect themselves from the process of the shareholders that might dilute the value of the bond. These processes involve as:
1. Call capability Provisions
These provisions will give such the borrower will have to pay the debt before the ending of the maturity duration if there is breach of conditions and terms of the bond covenant.
2. Transfer of Asset
3. Representation
The bondholder or lender may insist to have a representative in the board of directors of the borrower who such will oversee the consumption of the debt capital borrowed and safeguard the interests of the bondholder or lender.
4. Refuse to lend
Whereas the borrowing company has been included in un-ethical practices associated along with the debt capital borrowed, such the lender may withhold the debt capital thus the borrowing firm may not get together its investments requires without adequate capital.
The different way to this is to charge high interest as a deterrent mechanism on the borrower.
5. Convertibility
On breach of bond agreements, the lender might have the right to change the bonds into ordinary shares.
Lock-Box System In a lock-box system, the customer sent the payments to a post office box. The post office box is emptied with the firm's bank at minimum once or twice all bus
Illustrate the role of credit unions in depository institutions. Credit unions: Credit unions are non-profit institutions equally organised and owned through their member
Profit maximization - Objectives of Business Entity Conventionally, this was considered to be the main goal of the firm. Profit maximization refers to getting the highest poss
Example of Replacement of Assets Estate Developers purchased a machine five years ago on a cost of £7,500. The machine had a probable economic life of 15 years at the moment
continous time finaince expert
according to given specialization take down an industry and investigate its managerial hierarchy to describe each of one of the managerial work level functioning
Since 1968, Dracula Limited has traded in Doncaster, South Yorkshire as a manufacturer of fancy-dress and theatrical costumes. It produces a wide range of general theatrical costum
Question 1: Consider a 5-year $10,000 endowment assurance issued to a select life aged 30 under the following bonus schemes:- (a) Simple reversionary bonuses of 5% p.a., 6%i
At t = 0, a 3-year, 7% coupon corporate bond with face value $1,000 is trading at a credit spread of 15%. The risk free rate is constant and equal to 4% for all maturities. The rec
Factors of Capital Structure 1. Availability of securities - This influences the company's employ of debt finance that means such if a company has enough securities, so then
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd