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Pages:
2 pages/≈550 words
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Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
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Date:
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Topic:

After a Wild and Profitable Ride, Bonds Can Still Provide Safety: A Bond Valuation

Essay Instructions:

Choose one recent articles, which appeal to you and which are directly related to finance topics we discussed in class.
Suggested sources:
•New York Times (https://www(dot)nytimes(dot)com)
•Yahoo Finance (https://finance(dot)yahoo(dot)com)
•Reuters (http://www(dot)reuters(dot)com)
•Financial Times (https://www(dot)ft(dot)com)
•Wall Street Journal (https://www(dot)wsj(dot)com)
•TheEconomist (https://www(dot)economist(dot)com)
•Bloomberg (https://www(dot)bloomberg(dot)com)
•The Washington Post (https://www(dot)washingtonpost(dot)com/business/?utm_term=.3015f55c2718)
•Others
2.Your papers should have the following sections:
-Provide a quick summary of each article in your own words
-Discuss how these articles relate to topics we covered in class, briefly describe specific principle that we have covered in class, why are these current events important, who/whatis affected by it,and their wider implications
-Conclusion

Tentative Semester Schedule:Week Dates Topics Text Notes1 Aug 27 Review of Syllabus and Course Requirements  Introduction to Corporate Finance Financial Statements Ch. 1, Ch. 2 2 Sep 3 Working with Financial Statements Ch. 3 3 Sep 10 Long-Term Financial Planning and Growth Ch. 4 4 Sep 17 Introduction to Valuation: The Time Value of Money  Review for Exam I Ch. 5 5 Sep 24 Exam I  Discounted Cash Flow Valuation Ch. 6 Sep 24 -Exam I6 Oct 1 Bond Valuation Ch. 7 7 Oct 8 Group Presentations  Stock Valuation Ch. 8 Oct 6 (midnight) -Group reports are due  Oct 8 -Group Presentations8 Oct 15 Net Present Value & Other Investment Criteria Ch. 9 9 Oct 22 Some Lessons from Capital Market History Ch. 12 10 Oct 29 Return, Risk and the Security Market Line  Review for Exam II Ch. 13 11 Nov 5 Exam II  Cost of Capital Ch. 14 Nov 5 -Exam II12 Nov 12 Raising Capital Ch. 15 13 Nov 19 Group Presentations of a Mini Case  Financial Leverage and Capital Structure Policy Ch. 16 Nov 17 (midnight)-presentations are due Nov 19 - Group presentations of a mini case14 Nov 26 Thanksgiving Holidays - No Classes 15 Dec 3 Financial Leverage and Capital  Structure Policy  Dividends and Payout Policy Ch. 16 Ch. 17

Formula Sheet1. FV = PV*(l+r)*

2. PV = FV/(l+r)‘
3. r = (FV / PV)17' - 1
4. t = ln(FV/PV)/ln(l +r)5. Bond Value = PV of coupons + PV of par value or1 11-(1 + r)1FV+(1 + r)1Bond Value = CJ6. Coupon payment = face (or par) value * coupon rate7. Effective Annual Rate (EAR):
• m is the number of compounding periods per year

Essay Sample Content Preview:

Recent Finance Article
Student’s Name
Institutional Affiliation

Recent Finance Article
A bond is an agreement between the holder and issuer that requires the latter to pay the former the agreed amount after a specific period. The article “After a Wild and Profitable Ride, Bonds Can Still Provide Safety” by Carla Fried depicts that bonds can be unpredictable. In 2018, bondholders suffered since the rate of interest rose tremendously. Fried makes it clear that the bond and exchange-traded fund (ETF) returns involve the sum of interests that one earns, which depend on the prices of bonds. When the rate of interest plummets, bond prices increase (Fried, 2019). In other words, bondholders get more money when the interest rates decline, which is the case that happened this year. For this reason, the article portrays that regardless of the rise and fall of the rate of interest, bondholders are safe despite the fluctuation of bond prices.
Fried’s article relates to chapter seven of the textbook, where one learned about bond valuation. One of the most significant principles that a person learned in the semester was bond valuation. In particular, it refers to the technique used in determining bonds the fair value. The process entails calculating a bond’s present value using the bond value and the established interest payments when it matures, which is also known as the par or face value. The following is the formula that one uses to calculate the bond value:

Therefore, when buying bonds, an individual needs to calculate the par value, which is the amount that one is likely to get upon maturity. Overall, the article reflects almost everything that one learned in the class through real-life examples.
The current events discussed in the article are vital since they remind bondholders about the things they should consider when buying bonds in 2019. In addition, many bondh...
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