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có thể có chỗ sai do AI nó không hiểu được biểu đồ ý (15.2 phần Equity versus Debt,
Features of an Intel Bond) nên bạn nhớ đọc lại sách nhé

15.1 Some Features of Common and Preferred Stocks

Common Stock Features:

Shareholder Rights:
- Shareholders control a corporation by electing directors.
- Directors are elected annually, and the general rule is "one share, one vote."
- Voting mechanisms, such as cumulative and straight voting, affect minority participation in
director elections.

Proxy Voting:
- Shareholders can vote in person or through a proxy, granting someone else the authority to
vote on their behalf.
- Accumulating proxies is crucial for management, while outside shareholders may use proxies
in a proxy fight to replace management.

Classes of Stock:
- Some companies have multiple classes of common stock with unequal voting rights.
- The value of common stock is tied to shareholder rights, including voting, proportionate
sharing of dividends, and participation in significant decisions.

Dividends:
- Dividends are at the discretion of the board of directors.
- Dividends are not liabilities unless declared, and corporations cannot go bankrupt for not
paying undeclared dividends.
- Dividends are taxable for individual shareholders, but corporations can exclude 70% of
dividends received from other corporations.

Preferred Stock Features:

- Preferred stock pays a fixed dividend and has preference over common stock in dividend
payments and liquidation.
- Preferred stock is a form of equity but lacks voting rights.
- Stated value, cumulative or noncumulative dividends, and the treatment of preferred stock as
debt for tax purposes are key features.
- Preferred stock is often compared to debt due to its fixed nature, credit ratings, convertibility,
and callable features.

Summary:
Common stock represents ownership with voting rights, while preferred stock offers
fixed dividends with priority over common stock. Shareholder rights, proxy voting,
classes of stock, and dividend characteristics differ between the two. Preferred stock,
though resembling debt, is treated as equity for tax purposes.

15.2 Corporate Long-Term Debt

Debt and Equity Distinction:
- Debt represents borrowed money, requiring scheduled interest payments and principal
repayment.
- Creditors (lenders) provide the loan, and the borrowing entity is the debtor.

Is it Debt or Equity?
- Sometimes, securities blur the line between debt and equity.
- Corporations design hybrid securities to gain tax benefits of debt and bankruptcy benefits of
equity.

Equity vs. Debt:

- Debt is not an ownership interest; creditors usually lack voting power.
- Interest on debt is a tax-deductible business expense, unlike dividends.
- Unpaid debt is a liability, and creditors can legally claim assets in case of default.

Long-Term Debt Basics:

- Long-term debt includes bonds with maturities exceeding one year.
- Bonds can be publicly or privately issued, with public bonds being the primary focus.
- The bond indenture is a legal agreement between the corporation and bondholders, outlining
key provisions.

Features of a Bond:
1. Face Value (Principal): Denomination typically $1,000, representing the borrowing amount.
2. Registered vs. Bearer Form: Bonds can be registered (recorded ownership) or bearer
(payment to the holder).
3. Security: Collateral or mortgage protects bondholders. Bonds can be secured or unsecured
(debentures).
4. Seniority: Indicates preference in position; some debt is subordinated.
5. Repayment: Bonds can be repaid at maturity or before; sinking funds are used for early
repayment.
6. Call Provision: Allows the company to repurchase bonds at specified prices over a specific
period. Bonds are often callable.
7. Protective Covenants: Negative (limits) and positive (requires) covenants in the indenture
affect corporate actions.

Indenture:
- The written agreement between the corporation and bondholders.
- Includes provisions on basic terms, property description, seniority, repayment arrangements,
call provisions, and protective covenants.

This summary provides an overview of the essential concepts related to long-term

corporate debt and bonds.

15.3 Some Different Types of Bonds

Floating-Rate Bonds:
- Definition: Bonds with adjustable coupon payments tied to an interest rate index (e.g.,
Treasury bill rate or LIBOR).
- Adjustment Basis: Typically linked to a base rate with a lag (e.g., average Treasury bond
yields over the previous months).
- Additional Features:
1. Put Provision: Holders can redeem the bond at par on the coupon payment date after a
specified period.
2. Coupon Rate Limits: Often has a floor and a ceiling, creating a capped coupon rate. The
upper and lower rates are referred to as the "collar."

Other Types of Bonds:

1. Warrant Bonds:
- Feature: Attach warrants granting the right to buy shares at a fixed price during the bond's
life.
- Distinction: Warrants can be separated and traded independently of the bond.

2. Income Bonds:
- Characteristic: Similar to conventional bonds but with coupon payments contingent on the
company's income.
- Coupon Payment Condition: Payments made only if the firm's income is sufficient.

3. Convertible Bonds:
- Convertible Feature: Can be exchanged for a fixed number of shares before maturity at the
holder's discretion.
- Commonality: Relatively common, although the number has decreased in recent years.

4. Put Bonds:
- Put Feature: Allows the bondholder to compel the issuer to repurchase the bond at a
predetermined price.
- Example: International Paper Co. bonds with a put option triggered by specific events like a
credit rating downgrade.

5. Exotic Bonds:
- CoCo Bonds: Contingent Convertible bonds with unique features like a contingent
conversion clause based on certain conditions.
 - NoNo Bonds: Zero-coupon bonds with complex features, often contingent, putable, callable,
and subordinated.
- Complex Valuation: Valuing such bonds can be intricate, and traditional yield to maturity
calculations may not be meaningful.
- Examples: AIG and Merrill Lynch issued NoNo bonds with negative yields to maturity in
certain cases.

This section highlights the diversity in bond structures, showcasing the creativity in
designing financial instruments. Each type caters to specific investor preferences or
issuer needs, contributing to the richness of the bond market.

15.4 Bank Loans:

Lines of Credit:
- Definition: Firms can borrow directly from banks, with notable features being lines of credit.
- Line of Credit Concept:
+ Maximum Amount: Banks set a maximum amount that the business can borrow, known as a
line of credit.
+ Flexibility: Businesses borrow as needed, and the bank commits to providing funds up to the
specified limit.
- Revolver: If the bank is legally obligated to provide credit, it's termed a revolving line of credit
or revolver.
+ Example: A $75 million revolver with a three-year commitment allows borrowing within the
limit at any time in the next three years.
- Commitment Fee: Charged on the unused portion of the revolver to compensate for the
commitment made by the bank.
+ Calculation Example: If the commitment fee is 0.20%, and $25 million is borrowed while $50
million remains unused, the fee is $100,000 (0.20% * $50 million).

Syndicated Loans:
- Overview: Large banks, like Citigroup, may arrange syndicated loans due to excess demand
or supply constraints.
- Composition:
+ Lead Arranger: Takes the lead in negotiations with the borrower and arranges the loan
specifics.
+ Participant Lenders: Banks forming a syndicate, buying portions of the loan from the lead
arranger.
- Process:
+ Negotiation: Lead arranger negotiates with the borrower on behalf of the syndicate.
+ Loan Allocation: Determines each participant lender's share of the loan.
- Lead Arranger Compensation:
+ Fees: Receives up-front fees as compensation for additional responsibilities.
+ Loan Share: Generally lends the most among the participant lenders.
- Syndicated Loan Types:
 + Publicly Traded: Some syndicated loans can be publicly traded.
+ Line of Credit: Can be either "undrawn" or used by a firm.
- Credit Ratings:
- Investment Grade: Syndicated loans are typically rated investment grade.
- Leveraged Syndicated Loan: If leveraged, it may be rated speculative grade, indicating a
higher risk ("junk" rating).

Bank loans, through lines of credit and syndication, provide businesses with flexible
financing options and enable banks to efficiently manage their funds and risk exposure.
Syndicated loans, in particular, involve collaboration among multiple banks, offering a
diversified approach to lending and risk management.

15.5 International Bonds:

Eurobonds:
- Definition: A Eurobond is a bond issued in multiple countries but denominated in a single
currency, typically the issuer's home currency.
- Example: An American firm might issue a dollar-denominated bond in various foreign
countries.
- Key Characteristics:
+ Syndication: Eurobonds are syndicated and traded, primarily from London but can be traded
anywhere with willing buyers and sellers.
+ Currency Neutrality: Denominated in a single currency, irrespective of the countries in which
they are issued.
+ Pre-Euro Creation: Eurobonds existed before the introduction of the euro in 1999, causing
some confusion due to the similar terms.
+ Alternative Term: To avoid confusion, some prefer to use the term "international bonds"
instead of Eurobonds.

Foreign Bonds:
- Definition: Foreign bonds are issued in a single country and denominated in that country's
currency.
- Example: A Canadian firm issuing yen-denominated bonds in Japan.
- Distinctive Characteristics:
+ Country-Specific: Often nicknamed based on the country of issue (e.g., Yankee bonds for the
U.S., Samurai bonds for Japan, etc.).
+ Regulatory Variances: Subject to different tax laws, issuance restrictions, and disclosure
rules compared to domestic bonds.
- Examples of Foreign Bonds Nicknames:
+ Yankee Bonds: Issued in the United States.
+ Samurai Bonds: Issued in Japan.
+ Rembrandt Bonds: Issued in the Netherlands.
+ Bulldog Bonds: Issued in Britain.
- Market Growth Dynamics:
 + Regulatory Impact: Due to stricter regulations and disclosure requirements, foreign bond
markets may not grow as rapidly as the Eurobond market.

Summary:
International bonds, whether Eurobonds or foreign bonds, provide diverse financing
options for companies and governments. Eurobonds, traded globally, offer flexibility,
while foreign bonds, issued in a specific country's currency, navigate distinct regulatory
landscapes. The terminology associated with foreign bonds often reflects the country of issue,
adding a unique aspect to the international bond market.