Amortization Of Bonds 1
Amortization Of Bonds 1. Necessity For The Amortization Of Bonds.—it Is Desirable, If The Terms Are Advantageous, For Corpora Tions To Borrow Upon Long-term Bonds. When Cor Porate Notes Or Other Short-term Obligations Mature, They Are Expected To Be Paid. When Bonds Mature, The Debt Is Not Usually Retired, But ...
Bonds Secured By Leases
Bonds Secured By Leases 1. Leases As Collateral.—a Lease Is A Contract By Which One Party, Known As The Lessor, Temporarily Transfers The Possession Of Property To Another Party, Known As The Lessee, In Return For A Certain Charge, Known As A Rental. As A Rule, Leases Serve As Collateral ...
Capital Stock 1
Capital Stock 1. Stock And Non-stock Corporations.—capital Stock Has Already Been Defined As The Vested Interest Which The Owners Of A Corporation Have In The Com Pany. A Share Is Merely One Of The Equal Parts Of The Capital Stock. The Shareholders Are The Owners Of The Corporation; In Fact, ...
Capital Of The Corporation
Capital Of The Corporation 1. Care In The Use Of Terms.—in Considering Cor Poration Finance It Is Necessary At The Outset, To Learn Its Language And To Distinguish Carefully Certain Terms Relating To Capital And Capitalization, Particu Larly The Following: Capital Capital Funds Capital Investment Capital Assets Capitalization Capital Stock ...
Capitalization 1
Capitalization 1. Over-capitalization Versus Stock-watering. Having Examined The Nature Of Corporate Capital And The Instruments By Which It Is Obtained, It Is Next In Order To Discuss Limitations Upon The Use Of These In Struments. Our Reader Is Referred Again To A Careful Consideration Of The Definitions In Chapter Ii. ...
Collateral Trust Bonds 1
Collateral Trust Bonds 1. Use Of Collateral Trust Bonds.—technically Speaking, All Bonds Which Are Secured By Personal Property Deposited With A Trustee For The Benefit Of Bondholders Are Collateral Trust Bonds. In Practice, However, Mortgage Bonds Occupy A Separate Classifi Cation, And Bonds Secured By Lease Are Variously De Scribed ...
Dividends And Surplus 1
Income, Dividends And Surplus 1. Income Statement..—the Financial Policy Of A Corporation Cannot Be Intelligently Determined With Out A Fairly Accurate Knowledge Of Its Present Condi Tion And Operating Results. If The Business Is Well Systematized And The Transactions Properly Recorded Upon The Books, The Present Condition Will Be Reflected ...
Financing Reorganizations 1
Financing Reorganizations 1. Readjustment Of Capital Account.—any Change In The Plan Of Capitalization Of An Operating Company Is Entitled A "readjustment Of Capital Account." Suc Cessful Companies Make Such Changes To Remedy Ex Isting Defects In The Financial Structure Or To Meet Some New Or Unforeseen Requirement Of The Business. ...
Financing The Small Company
Financing The Small Company 1. Special Methods For Small Companies.—small Companies, With A Capital From $10,000 To $200,000, Are Usually Locally Owned. Their Securities Are Not Listed On The Exchanges, Nor Are They Underwritten Or Sold By Investment Bankers Or Large Brokers. While Many Are Directly Concerned With Financing Or ...
Investment And Maintenance Of
Investment And Maintenance Of Capital 1. Gradual And Efficient Investment Of Capital Funds.—many Corporations Sow The Seeds Of Their Fail Ure In The First Year Of Business By The Unwise Invest Ment Of Capital Funds. Many Others, Having Tasted A Brief Success, Gradually Fall Into The Habit Of Careless Capital ...
Miscellaneous Bonds And Preferred
Miscellaneous Bonds And Preferred Stocks 1. Debenture Bonds.—we Have Seen That Bonds Are Essentially Of Three Classes : Mortgage Bonds, Secured By Real Estate; Collateral Trust Bonds, Secured By Per Sonal Property; And Debenture Bonds, Not Secured By The Pledge Of Any Specific Asset. Redeemable, Con Vertible, Participating, Or Income ...
Mortgage Bonds 1
Mortgage Bonds 1. Long-term, Loans. We Have Seen That Trade Credit And Short-term Loans May Be Safely Relied Upon Only For Working Capital, Or Pending The Assured Sale Of Permanent Securities. In Any Event, They Must Be Well Covered By Liquid Assets. Permanent Or Fixed Assets, Unless Secured By The ...
Promoting Consolidations 1
Promoting Consolidations 1. Economic Advantages Of Consolidation.—com Petitors In Any Given Line Of Business Frequently Find It Advantageous To Consolidate Their Interests For The Purpose Of Effecting Economies Of Production Or Distribution, Or To Control The Market. The Prin Cipal Economies Of Consolidation May Be Summarized As Follows: 1. Price ...
Promoting The New Enterprise
Promoting The New Enterprise 1. Work Of The Promoter.—in The Financial Sense, A Promoter Is One Who Assembles The Capital For A New Business Enterprise. Individual And Partnership Un Dertakings Rarely Require The Services Of A Professional Promoter, But Corporate Enterprises Are Frequently So Large And So Widely Owned That ...
Selling Stocks And Bonds
Selling Stocks And Bonds 1. Methods Of Selling Securities.—there Are Four General Methods Of Selling Corporate Securities : 1. Compulsory Or Preferential Offering To Present Stockholders 2. Thru Underwriters And The Stock Exchange To Investors 3. Thru Established Bond Or Brokerage Houses To Investors 4. Direct Sale By The Corporation ...
Short Term Loans 1
Short-term Loans 1. Short Versus Long-term Loans.—in The Legal Sense A Note And A Bond Are The Same, Each Being A Written Promise For The Future Payment Of Money. In Finance, However, Different Meanings Are Given To These Terms, Based Upon Distinctions Of: (1) Time, (2) Formality Of Contract, (3) ...
Stock Not Paid In
Stock Not Paid In Cash 1.. Cash Payment Not The Universal Rule.—a Care Less Reading Of The Incorporation Statutes Might Easily Give The Impression That The Capital Stock Of A Corpora Tion Must Always Be Paid In Cash. But This Is Not The Case, And A More Careful Search Of ...
Trade Credit And Bank
Trade Credit And Bank Loans 1. Corporate Loans And Liabilities.—corporations Can Secure Capital Only By Gift, The Sale Of Capital Stock, Or Borrowing. The Borrowing May Take Any One Or More Of Numerous Forms. The Chief Means By Which Corporations Can Borrow Are: Trade Credit Short-term Bank Loans Or Discounts ...
A Preliminary Sketch 1
The Corporation, A Preliminary Sketch 1. Scope Of Corporation Finance.—corporation Finance, As Distinguished From Other Branches Of Finance, Relates To The Methods And Policies Involved In Securing Capital And Managing The Finances Of In Corporated Business Enterprises. A Simple Example Will Serve To Illustrate The Scope Of The Sub J ...