Most bonds are bearer certificates, so after being issued (on the primary market), they can be traded on the secondary bond market until they mature.
For companies, the advantage of bonds issue over shares issue is that bond interest is tax deductible. In other words, a company deducts its interest payments from its profits before paying tax, whereas dividends to shareholders are paid out of already-taxed profits. On the other hand if debt increases financial risk also increases. Bond interest has to be paid, even if the year was without any profits from which to deduct it and the principal has to be repaid when a bond reaches maturity.
And why do governments issue bonds? Governments, of course, unlike companies, do not have the option of issuing shares. Consequently they issue bonds to reduce the money supply, they sell bonds to commercial banks, and withdraw the cash received from circulation; to increase the money supply they buy them back.
There are different types of companies' bonds.
" Secured (mortgage) and unsecured (naked) debentures.
If a company cannot repay the loans or pay the interest, the holders of secured debentures are automatically entitled to payment from the company's assets. But holders of unsecured debentures are not automatically repaid from the company's assets if the company is unable to pay in the usual way. They can of course go to court to recover their money, but are not treated differently from the shareholders. An unsecured debenture is basically no more than a promise to repay a loan.
" Registered and bearer debentures
The holders of registered debentures are listed in a company register. These debentures can only be transferred in accordance with certain terms and conditions, and every transfer must likewise be entered into the register. A bearer debenture is an unregistered debenture which can be negotiated by just handing it over to the new holder.
" Redeemable and irredeemable debentures
Redeemable debentures are repaid on a fixed date or within a certain period, often at a higher price than the issue price, which means some extra money for the holder. There is no fixed date for the repayment of irredeemable debentures; the loan is only repaid when the company is liquidated. However, holders of irredeemable debentures may ask the company to redeem them if it fails to keep up its interest payments.
" And there are also convertible debentures that can be exchanged for ordinary shares if a debenture holder wants.
There are also different types of government stocks that fall into three categories depending on the date of maturity:
" Shorts: bonds to be redeemed in 7 years or less;
" Mediums: bonds to be redeemed in a period of 7 to 15 years;
" Longs: bonds to be redeemed more than 15 years from the date of issue.
And in the end it's necessary to say that the choice of bonds depends on readiness of an investor to risk.
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MY FAVOURITE RUSSIAN WRITER
I consider that books are with us during all our life. When I was a child my parents read them to me and I was pleased to listen to the stories and tales. I learned a lot of interesting and useful things from books. Later I could read myself and books brought me a lot of pleasant moments.
In general I'm fond of reading and to my mind books are a source of emotional inspiration and romantic feelings. Reading means much in our life. It is very useful because books enrich our experience with that of other people, help to continue our self-education and to discover what we are. Reading is a rewarding pastime, as the time spent on a good book is never wasted. But some people think that a tempo of modern life is too fast to waste time on reading. They are sure that books have begun to lose their prestige and value. I agree that our century is the century of computers and progressive technologies, but it doesn't mean that one day books will be replaced by computers. We read love and detective stories, science fiction and historical novels for pleasure and they create a special atmosphere. Books take us into the imaginary world of high human emotions and exciting relations. Owing to books we have the invisible contact with the writer who speaks with us from the passed centuries. I'm sure that computers are unable to replace these things. In my opinion books are not only things which help us to wide our knowledge but they are as teachers help us in different situations and set examples. Books teach us what is right and what is wrong, to understand the world we live in and people in it; they mould our character and at the same time they tell us exciting stories.
Unlike most of young people, who read little, I have been doing regular reading since my childhood. Today youth isn't used to reading. Reading tends to be something you enjoy more as you get older, but if you don't develop a taste for it when you are young you may never discover the pleasure of getting involved in a good book. In my opinion, the main advantage books have over all other entertainments like computer games, videos or TV is that they are relatively inexpensive and portable. I mean you can take a book with you whenever you go, it doesn't break down if you get sand inside it, you don't need batteries and you can put it down and pick it up whenever you like - the only equipment you need to have is a bookmark.
I should say that we have a large collection of books at home, but I never miss the opportunity to borrow some new books from the library. I have been interested in Russian and Belarusian literature since my childhood. As far as Russian literature is concerned it is hard to name one favourite writer or one favourite book especially if we are talking about the 19th and the beginning of the 20th centuries, known as the "golden" and "silver' periods in the Russian culture. Such giants of Russian literature as A. Pushkin, I. Turgenev, I Tolstoy, A. Chekhov and many others are known all over the world.
The writer who stands out of this list for me is Fyodor Michailovich Dostoyevsky. I think I can never forget my first acquaintance with him. Nearly three years ago when I came to our local library the librarian, a pleasant young lass, offered me to borrow "Crime and Punishment" by Dostoyevsky. The title of this book tells its own tale and though I have never enjoyed books about murders and crimes I decided to take it, as I have heard about Dostoyevsky as about one of the most seminal writers in European literature. But after reading his book, "Crime and Punishment" became my favourite book and its author came into my life as my beloved Russian writer.
I look upon him not only as a great writer but a great philosopher as well. His ideas had an immense influence on the literature that followed and his deep penetration into the human soul and the motives of people's behaviour impresses the modern reader as much as it did his contemporaries.
Dostoyevsky was born in Moscow on October 30, 1821. He was the second son of a former army doctor. Though the Dostoyevskies were a middle-class family the father was able to provide the best education for his sons. The boy was educated at a private Moscow boarding school and, shortly after the death of his mother in February 1837, was sent to St. Petersburg, where he entered the Army Engineering College. He received a commission in 1843 and was attached to the Army Engineering corps, but in 1844 Dostoyevsky resigned his commission to devote himself to literature.
In the spring of 1846 he joined the group of Utopian socialists led by Michael Butashevich-Petrashevsky. And in April 1849 Dostoyevsky and other members of the group were arrested and imprisoned for eight months in the Petropavlovsk fortress. On November 16 Dostoyevsky was sentenced to death, but the death sentence was commuted to four years of hard labor in a Siberian prison. After his release from prison in February 1854, Dostoyevsky did his compulsory army service in Siberia.
In March 1857 Dostoyevsky resigned from the army and return to St. Petersburg. Two years after his return, at the end of 1859, he founded the monthly periodical "The time" under the nominal editorship of his elder brother Michael, who was his best friend throughout his life. But some years later "The Time" was suppressed because of an article on the Polish uprising.
Dostoyevsky died in St. Petersburg on January 28, 1881, from a burst blood vessel in his lungs, aggravated by an attack of epilepsy.
Fyodor Michailovich Dostoyevsky died but he left his descendants a large heritage. At present Dostoyevsky is still among the most widely read authors, whose contribution to the world literature can hardly be overestimated. I consider that he is so popular among the readers because of the problems raised by him; these problems haven't lost their significance. Dostoyevsky wrote about Russian people and the problems of the Russian society of his time, his genius made the problems raised international and vital for people of all nationalities. Among his outstanding novels are "The Idiot", "The Devils", "The Adolescent", "The Brothers Karamazov", "Humiliated and Abused", but as I have said before my favourite is "Crime and Punishment".
To my mind the novel "Crime and Punishment" is one of the best books I've ever read which leaves lasting impression and unforgettable feelings. It holds your attention from the start and becomes more exciting as it progresses.
The author worked upon this novel in 1865 and throughout the following year and the book was published in 1866. It is the psychological account of a crime. A young man Radion Raskolnikov, sent down from university, of middle-class origins and living in extreme poverty has decided to break out of his appalling situation. He decides to kill a certain old woman, the pawnbroker Alyona Ivanovna. The old woman is stupid, deaf, ill and greedy; she is evil and torments the life of her younger sister. "She is of no use for anything", "why does she live?"', "is she of any value to anybody at all?" - such questions thoroughly disconcert the young man. He decides to kill and rob her in order to improve the fortunes of his mother and sister. He wants to save the family, finish his course, go abroad and then for the whole of the remainder of his life to be honest. Despite the fact that such crimes are terribly difficult to carry out, he carries out his plan quickly and successfully. He passes almost a month after this before the final catastrophe. Nobody suspects him and here the whole psychological process of the crime unfolds. Insoluble questions confront the murderer, unsuspected and unanticipated feelings torment his heart. God's truth and the earthly law and justice take their toll, and he ends by being compelled to give himself up.
I have a really high opinion of this book, as I got the whole pleasure from it. This is the book which, once you have started, is impossible to put down. While reading the novel you share all Radion's feelings and fears together with him, you try to understand his behaviour and thoughts, to cut the long story short, you live together with the main hero. "Crime and Punishment" includes strong elements of realism; you can find a certain theme to think over at every page of the novel. From my point of view all these make the book unforgettable and peculiar. And I think if I met a person who hasn't read this book, I would recommend him or her to read it, as "Crime and Punishment" is a real masterpiece of Russian literature.
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MY FAVOURITE AMERICAN WRITER
I consider that books are with us during all the life. When I was a child my parents read them to me and I was pleased to listen to the stories and tales. I learned a lot of interesting and useful things from books. Later I could read books by myself and they brought me a lot of pleasant minutes.
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