Foreign bonds and Eurobonds
List some of the differences between the foreign bonds and Eurobonds and also describe why Eurobonds make up lion’s share of the international bond market.
Expert
Two segments of international bond market are:
a) Eurobonds and b) Foreign bonds.
Foreign bond issues are the one that is provided by the foreign borrower to investors in the national capital market and is denominated in that nation’s currency. Eurobond issue is one that is denominated in particular currency, however, sold to investors in the national capital markets other than the country that issues denominating currency.
Eurobonds make up over 80 percent of international bond market. Two important causes for this arise from the fact that U.S. dollar is the currency that is frequently sought in the international bond financing. Firstly, Eurodollar bonds is brought to the market more rapidly as compared to the Yankee bonds since they are not provided to the U.S. investors and therefore do not have to meet the strict SEC registration requirements. Secondly, Eurobonds are bearer bonds which give anonymity to the owner and therefore provide the mode for evading the taxes over the interest received. Due to this, investors are usually willing in order to accept the lower yield on Eurodollar bonds as compared to the registered Yankee bonds of comparable terms, where the ownership is recorded. For borrowers, lower yield means a lower cost of debt service.
What are Impersonal accounts and how it is classified?
Presently, spot exchange rate is $1.50/£ and three-month forward exchange rate is $1.52/£. Three-month interest rate is 8.0% per annum within the U.S. and 5.8% per annum within the U.K. Suppose that you can borrow as much as $1,500,000 or £1,000,000.
What is the difference between the equity theory and the social exchange theory ? Define both the theories in brief.
Comment over the below proposition: “One can say that Bretton Woods’s system was programmed to the eventual demise”.
State some of the problems which may enter into capital budgeting analysis in case project debt is computed rather than borrowing capacity made by the project?
Give a short introduction of the term ‘cash budget’? And also write down the dissimilar techniques to make it?
Identify and explain important components of social interaction.
Explain how the advent of euro would affect the strategies of international diversification.
Specify some of instances under FASB 52 that foreign entity’s functional currency would be same as the parent firm’s currency.
Write down the demerits of implementing Uniform Costing?
18,76,764
1947996 Asked
3,689
Active Tutors
1432273
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!