Transcript Financial statements

Describing graphs in a paragraph, cont.
• HW check: RB 37
quite similar.
1) The number of inhabitants ... is ____________
decreased / declined
2) Both countries’ exports ___________________.
3) In both countries, the number of people out of work
increased/soared
_____________, in Croatia this was
by approximately 13%
___________________.
plummeted
4) The GDP in both countries _______________,
in
Finland __________,
in Croatia __________.
by 13 %
by 6.9 %
contracted further this year.
5) Croatia’s GDP ________________
cut
12%
6) Personal income tax was _______
by ________
the
14%
corporate tax rate was ________
in F.
slashed by ________
Describing graphs in a paragraph, cont.
• HW check: RB 37 – cont.
decreased its taxes by _________
almost 50 %.
7) Finland _________
2% rise
8) Last year there was a ___________
in VAT in Croatia.
rose
9) In Croatia taxes ___________,
while income from
decreased
taxes is __________________.
small increase of 1.5%
10) The World Bank forecasted a ______________
in 2014.
Practice describing a graph
• Handout (start now, finish for HW)
Source: www.fxstreet.com/rates-charts/bond-yield
If you like, use the following sentences /phrases:
The graph shows weekly yields on USD T-Bonds
between 2005 and the present date.
... weekly yields on US government bonds with
maturities ranging from 5 to 30 years.
30-yr, 10-yr and 5-yr T-Bond yields
5-yr T-Bond yield
30-yr yield
HW check: Match up verbs with nouns
MK, p 82, task Vocabulary 2
1 borrow ______
9 deduct ______ _______
2 finance ________
10 issue ______
3 issue ______
11 pay (a rate of) ______
4 pay a (higher) ______
12 pay _________
5 pay ______
13 receive ______ ______
6 raise ______
14 repay ______ 15 sell ______
7 deduct ______ 16 receive ________
17 repay _____ 18 repay ______
19 sell ______
HW check: Match up verbs with nouns
borrow money
deduct interest payments
finance activities
issue shares
issue bonds
pay (a rate of) interest
pay a (higher) return
pay dividends
pay tax
receive interest payments
raise money
repay principal
sell assets
deduct tax
receive dividends
repay bonds
repay money
sell bonds
The Financing of Corporate Activity, RB p77
Based on: McConnell, C.R., Brue, S.L. (1996). Economics. McGraw-Hill Inc.
Match headings with paragraphs
Text headings:
• Corporate finance
• Stocks vs. Bonds
• Bond risks
Pg. 3 BOND RISKS
RB, p 77-79
CORPORATE BOND RISKS
1. market value of bonds may fall, selling before
maturity may cause you to incur a capital loss
2. price of existing bonds varies inversely with interest
rates in the economy
3. inflation
Revision:
BOND RISKS – finish the sentences
Corporate bonds are not ....
riskless. The market value of bonds...
varies over time in accordance with ...
the financial health of the corporation.
If the corporation falls on hard times and its financial
integrity is shaken....
the market value of your bond may....
fall. Selling the bond on the bond market prior to...
maturity (for less than its...
nominal value) will cause...
a capital loss.
BOND RISKS, cont.– finish the sentences
Market prices of bonds are also affected by...
changes in interest rates. Increases in interest
rates cause bond prices to ...
fall. Decreases in interest rates cause ...
bond prices to rise. In other words, the market
value of a bond rises if it pays a ...
higher fixed interest rate than the current interest
rate.
Bondholders face another element of risk due to...
inflation. Substantial inflation will diminish the ...
purchasing power of the...
principal. You will have lent “dear” dollars, but...
will be repaid in “cheap” dollars.
Intro to stocks?
CORPORATE FINANCE, RB p 77:
Corporations (PLC’s) finance their activities in three
____
different ways. Internally, out of undistributed
________
corporate
borrowing
________ profits
_____ and externally, by _________
from financial institutions such as commercial
savings & ____
loan ___________
associations* or
banks, _______
insurance companies. Finally, corporations can
stocks & _______.
bonds
issue ______
* štedno kreditna zadruga
STOCKS VS. BONDS
• A stock is an ________
ownership _____
share while a
lending
bond is not. A bond purchaser is ______
money to a corporation.
• The stated value of a bond when it is first
face / par / nominal value.
issued is its _______________
• The amount lent to the corporation is the
principal and the corporation promises to
______
repay it at a specified future date, also
maturity date.
known as the bond’s ______
• The bondholder also receives annual
interest payments.
______
STOCKS VS. BONDS, cont.
risky for two
• Bonds are considered to be less ______
reasons:
stockholders only after
1. Dividends can be paid to ___________
the interest rates due to bondholders have been
paid. This means that bondholders have a legally
_____
prior _____.
claim
_____
2. If the corporation runs into problems,
dividends and the
stockholders may receive no ________
plummet / plunge / sink
value of their stock may ___________________.
Unless the corporation goes bankrupt,
bondholders are guaranteed a fixed interest rate
principal at _______.
maturity
and the return of the _______
HW MK, p 87: Reading Stocks and Shares