1 Once upon a time, when you bought broccoli you bought the whole vegetable, stems and crowns. Then it became customary for grocery store produce departments to separate the crowns from the stems and to sell the crowns at a premium. 2  Iâm not a fan of this practice, because I like both parts of the broccoli plant.
A company's first issue of common stock to the public is called an Initial Public Offering. Afterwards, a corporation may issue new equity at any time in order to finance its growth. When new common shares are offered to existing shareholders first, this is called a rights offering.
Company D's 10-year bond with par value of $1,000 and semiannual coupon of 8% is currently trading at $950. Find the yield to maturity on the bond. We defined yield to maturity as the rate which discounts the bond's future cash flows (coupons and par value) such that their present value equals the bond's market price. Company D's bond has a par value of $1,000; semiannual coupon of $40 (=8%/2Ã$1,000) and price of $950.