A bond can be defined as a contractual promise to repay a principal sum of money together with the interest, also known as coupons, at given maturity dates. Bonds are debt instruments that are issued for a period usually more than a year with the intention of raising capital. When investors purchase bonds, they became creditors of the issuer. The fair value of a bond is determined by the present value of cash flows that are to be generated from the bond in future at a given discount rate. Hence, the price of a bond is calculated using the present value formula at a specified discount rate. Price of the bond is calculated by the formula:
Essays on Stock market
Investors Behavior Toward Stocks Splits Literature Review
A share split is an action taken by corporate executives to increase the number of outstanding shares by dividing each share by a given split ratio that diminishes its price. In this case, the stock market capitalization does not change since the price per share reduces by the ratio of the share split. For instance, if a company splits its shares in the ratio of two shares for each one share held, the share holders will enjoy an increased numbers of shares nut at a reduced price thus the overall market capitalization remains unchanged.