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Junk Bond Market
Essay # 20733
Junk Bond Market
Provides an overview of market and looks at its function, ratings, returns, relation to economy, interest rates and the rise & fall of Michael Milken & Drexel Burham Lambert.
1,125 words (approx. 4.5 pages) |
6 sources |
1993
From the Paper:
"Companies in need of raising capital can do so in two ways: one, they can sell equity to raise cash, or two, they can borrow the funds. If the company chooses to sell equity, it faces possible ownership dilution and a loss of control for its current owners. For this reason, it may be more advantageous for the company to seek borrowed funds. Two common sources of borrowed funds are loans and bonds. Loans are generally administered by banks or similar financial institutions; bonds are issued directly by the company to the bondholders. Because bonds are an important investment option held by pension funds, insurance companies and other institutional investors, the market has established rating systems for evaluating the attractiveness of bonds issued by various companies. Bonds which fall in the lower echelons of this rating system are called "junk" bonds. Such bonds.."More papers on Junk Bond Market:
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APA Citation:
Junk Bond Market (2012, January 15). Retrieved February 12, 2012, from http://www.academon.com/Essay-Junk-Bond-Market/20733
MLA Citation:
"Junk Bond Market" 15 January 2012. Web. 12 Feb. 2012. <http://www.academon.com/Essay-Junk-Bond-Market/20733>
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