23.11.2023

Issuing bonds is a way to raise borrowed funds without losing control over management. What are bonds, types and properties of bonds Issue cost and factors influencing it

18. When inflation increases:

30. The main goal of finance

1. Bonds issued by an enterprise express the relationship:
12. Outgoing cash flows are:
14. The securities market in a developed market economy is for an enterprise:
15. Incoming cash flows are:
16. The financial system includes:
18. When inflation increases:
2. Risk diversification is:
21. The interests of the seller at any price of the security are:
22. Risk in financial management is:
23. Planning the activities of an enterprise in a market economy begins with:
24. The increase in the value of money is the process of determining:
26. The criterion for the effectiveness of decision-making on the use of funds is:
28. Income and profitability are:
29. The value of any security is determined as:
3. The time value of money states that:
30. The main goal of finance The basic management of corporations in countries with developed market economies are:
32. The interests of the buyer at any price of the security are:
5. The monetary management of enterprises includes:
8. Financial management at an enterprise is:
9. The basic bond valuation model is based on the assumption that

Bonds

Translated from Latin, “bond” literally means “obligation.” This refers to the obligation to repay the borrowed amount, i.e. debt obligation. The organization that issued the bond (issuer) acts as a borrower of money, and the buyer of the bond (investor, or bondholder) acts as a lender.

A bond is a security that certifies the deposit by its owner of funds and confirms the obligation to reimburse him the nominal value of this security within a specified period with the payment of a fixed percentage (unless otherwise provided by the rules of issue). A bond is a security that: 1) expresses a borrowed, debt relationship between the bondholder and the issuer; 2) independently circulates on the stock market until its redemption by the issuer and has its own exchange rate; 3) has the properties of liquidity, reliability, profitability and other investment qualities.

The bond has basic characteristics-- par value, rate, point, coupon (coupon percentage), maturity date, discount, etc. The bond rate is determined as a percentage of the par value. Discount - (like premium) is the difference between the sale price and the par value of the bond; in the case of a premium, this difference is positive, and in the case of a discount, it is negative. Another name for a discount is a rebate. Coupon (coupon interest) is a fixed percentage that is set at the time of bond issue. Based on this percentage, the bondholder receives regular payments on the bond. The coupon is usually issued as a detachable part of the bond. The higher the coupon percentage, the higher its investment attractiveness. The size of the coupon depends on the image and reliability of the issuer. It is also affected by the maturity of the bond. The longer the term, the larger the coupon, since market risk is directly proportional to the maturity of the bond.

A bond belongs to the main securities, is actively used in the stock market and is a fixed-term debt security that certifies the loan relationship between its owner and the issuer. It is issued, as a rule, for a period of one year or more. When purchasing a bond, the buyer credits the seller. The issuer undertakes to redeem the bond within the specified period. A bond is a monetary document confirming the borrower's obligation to reimburse the buyer the face value of a given security within a certain period of time with the payment of a fixed or floating income.

The main differences between a bond and a stock:

The bond generates income only during the period indicated on it;

Unlike an unguaranteed dividend on a common stock, a bond usually brings income to its owner in the form of a predetermined percentage of its face value (par value);

A bond of a joint-stock company does not give its owner the right to act as a shareholder of this company, i.e. does not give the right to vote at the general meeting of shareholders.

Bond returns are typically lower than stocks, but they are more reliable because they are less dependent on market conditions and cyclical fluctuations in the economy.

Bonds are issued to attract additional funds to carry out any activities that help increase profits or the volume of production of goods. Funds from the sale of government bonds are used to cover the state budget deficit. Bonds have the right to issue only legal entities(enterprises and their associations, joint-stock companies, cooperatives, banks, state or municipal administrative bodies).

Bonds are of the following types:

Registered - the owners of these bonds are registered in a special book, so such bonds are usually zero-coupon;

Bearer - have a special coupon, which is evidence of the right of the bond holder to receive interest upon the due date;

Ordinary (non-convertible) - often provide for the possibility of early repayment through redemption;

Convertible -- issued under borrowed capital with the right of conversion (after a certain period at a predetermined price) into ordinary or preferred shares;

Secured - issued on the security and secured by the issuer's real estate or trust property of other companies. The claims of the owners of such bonds as creditors are subject to priority satisfaction;

Unsecured bonds are not secured by real estate, so holders of such bonds are not given advantages over other creditors. In view of this, they have real value only if the issuer has a strong financial position and a high “bond” rating;

With a full coupon - sold at par and characterized by a coupon yield equal to the current market rate;

With a zero coupon - income on them is paid upon maturity by accruing interest to the face value without annual payments.

Bonds can be freely circulated or have a limited circulation. Bonds of state and municipal loans are issued to bearer. Corporate bonds are issued both registered and bearer. If a bond provides for periodic payment of income, it is usually made through coupons. Coupon income can be paid quarterly, semi-annually or annually. The more often the coupon income is paid, the greater the benefit the investor receives. Therefore, bonds with quarterly payment at equal annual percentage are always quoted higher than bonds that pay only once a year.

Foreign bank loans (Euroloans).

The cost of Euroloans includes commissions (to the bank manager for management, members of the banking syndicate), bank margin and interest rates on loans. Interest rates are revised every 6 months in accordance with current or base rates. Usually the rate is taken as a basis LIBOR. Other discount rates may also be used: rate prime rate USA – the lowest rate set for the most reliable borrowers, PIBOR(Paris Interbank offered rate,) etc.

In Russia there are practically no financial institutions capable of issuing loans of hundreds of millions of dollars for periods longer than one or two years. Therefore, for project and trade financing, large domestic companies raise funds from foreign banks.

It has become possible to obtain loans from non-residents without obtaining appropriate permission from the Central Bank of the Russian Federation to carry out operations related to the movement of capital. Therefore, large Russian companies often opt for lending abroad, even despite the complexity documentation Western bank loan or external loan.

There are certain advantages and disadvantages of obtaining foreign bank loans.

Corporate bond- this is a security that certifies the loan relationship between its owner (lender) and the person who issued it (borrower), the latter being joint-stock companies, enterprises and organizations of other organizational and legal forms of ownership.

Corporate bonds are classified:

1. By maturity:

· Bonds with a fixed maturity date: short-term, medium-term and long-term.

· Bonds without a fixed maturity: callable bonds, redeemable bonds, renewable bonds.

2. By order of ownership:

· Named.

· To bearer.

3. According to the purposes of the bond loan:

· Regular.

· Targeted.

4. According to the form of payment of coupon income:

· Coupons.

· Discount (no coupon).

· Bonds with payment at option.

5. Depending on the collateral:

· Secured by collateral.

· Unsecured by collateral.

6. By the nature of the appeal:

· Convertible.

· Non-convertible.

The book value of a bond loan, as a rule, does not coincide with its market value. The assessment of the market value of bonds is based on a number of data indicated on the bond itself: official issue date, par value, maturity date, announced interest rate, interest payment date.

Enterprises issuing loans strive to bring the announced interest rate on the bond as close as possible to the market rate in effect at the time the loan is issued. Changes in the market interest rate and the market value of the issuing company's loan are inversely related. If the market interest rate exceeds the announced one, then the placed bonds are sold at a discount ( discount), and in the opposite situation, it is added to their cost bonus.

Joint stock companies and limited liability companies are allowed to issue bonds. According to Russian legislation, there are a number of restrictions on the issue of bonds.

Depending on the volume of issue and the readiness of the enterprise for the issue, it is possible to use various methods of placing bonds.

Bonds are debentures, confirming the loan relationship between investors and issuers. In this case, the issuer (borrower) guarantees the investor (lender) payment of a certain amount upon expiration of a specified period and annual income in the form of a fixed or floating interest.

When it is necessary to attract financial resources (to finance large projects, cover current expenses, ensure liquidity, etc.), the state, local authorities, banks and other financial institutions, as well as individual corporations often resort to issuing bonds.

Bonds provide its owner with a certain income. An indicator of the development of the securities market is profitability. The initial basis for determining the yield of bonds, certificates and other securities is their price.

Bonds have the following price types:

Nominal - printed on the bond (issue price), serves as the basis for calculating interest and further recalculation of prices;

Redemption - the issuer buys back the bond; it may or may not coincide with the nominal price, which depends on the terms of the loan;

Market (exchange rate) - is formed in the securities market and depends on the current situation on it (demand and supply).

Government bonds are characterized by periodic payment of income in the form of interest. The interest rate can be of several types.

1. Fixed rate, i.e. precisely established in its size. It is usually used in non-inflationary conditions.

2. Floating rate. Floating rate bonds are issued in conditions of inflation, depreciation of money and, as a result, loss of interest by creditors in fixed interest bonds. To take into account the rate of inflation, the government begins to issue bonds with a floating interest rate (floating coupon). In this case, the amount of interest on bonds depends on the level of loan interest.

3. Stepped interest rate. The process of changing the interest rate is differentiated according to the years of the loan. This method of setting interest rates can be combined with indexation of the nominal exchange rate value of bonds (increasing it as inflation rises).

4. Zero coupon and mini coupon. If they exist, bonds are called interest-free and low-interest. In the case when bonds with a zero coupon are issued, the issue rate is set below the nominal value by the amount of the discount. Mini-coupon bonds are a transitional type to zero coupon. They have a lower coupon yield than normal, but the discount to the issue price is less than that of a zero coupon bond.

When determining the yield of bonds, you must first find its initial base - the nominal (nominal) price, which is equal to:

where 3 is the loan amount;

Pnom - nominal price of bonds;

K is the number of bonds issued.

The initial placement price of bonds, or the issue price, sometimes does not coincide with the nominal price, then two options are possible:

1) the issue price is less than the nominal price, therefore the security is placed at a premium;

2) the issue price is higher than the nominal price, which means that the security is placed at a premium.

When selling a debt obligation for secondary market a market price arises, the exchange rate of which can be defined as the ratio of this price (Rryn) to its nominal value;

where Kprices is the price rate.

Since the denominations of different bonds differ significantly from each other, it usually becomes necessary to have a market price meter, which is understood as the price of one bond per 100 monetary units of par value, namely:

where K is the bond rate;

Rryn ~ market price;

Pnom - bond par value;

For example, if a bond with a par value of 100 rubles. is sold at a price of 97 rubles, then the bond rate is 97.

If a bond with a par value of 180 rubles is sold at a price of 200

rub., then the bond rate is:

When purchasing a bond or certificate, an investor buys them at the issue or exchange price, and they are redeemed, as a rule, at par. Depending on the terms of the loan, these prices may not be the same. The difference between the redemption price and the purchase price of the security gives the amount of capital gain or loss over the entire life of the loan.

If the bond is redeemed at par, and it is purchased at a discount, then the investor ultimately has a capital gain:

The yield of the bond in this case is higher than indicated on the coupon.

If a bond is purchased at a premium price, then when this security is redeemed its owner suffers a loss:

Consequently, the yield of a bond purchased at a premium is lower than the price indicated on the coupon. A bond can also be purchased at a nominal price, in which case the investor has no income. In this case, the bond's yield is equal to the coupon.

The listed bond yield options allow you to calculate annual capital gain or loss:

where ΔDyear is the absolute value of capital gain or loss for the year;

ΔD - the absolute value of capital gain or loss over the entire loan term;

t is the number of years of the loan.

Annual additional profitability, or the rate of additional income (/additional), is equal to:

where ΔDyear is the purchase price of the bond.

Bond yield contains two values: coupon payments - remuneration for the loan provided to the issuer; the difference between the redemption price and the purchase price of the bond.

Coupon payments are made annually (sometimes quarterly or semi-annually); they are expressed as a percentage or absolute value.

The absolute value of the annual return (Dyear) is determined by the formula

where Ic is the annual coupon rate, percent;

Rnom is the face value of the bond.

The current coupon yield is determined by the formula

At the same time, the coupon yield largely depends on the influence of two factors: the term of the loan (here the relationship is reverse: the longer the maturity of the bond, the higher the yield percentage) and the quality of the security, primarily on its reliability.

To determine the yield of securities, formulas of ordinary and exact items are widely used. They apply, in particular, in cases where the bond is not sold at the beginning financial year and the coupon payments must be divided between the previous owner and the new one. When applying simple interest in calculations, it is assumed that each month of the year contains 30 days, and the year - 360 days. In this case, the coupon payments due to the bond seller are equal to:

Where ordinary interest ratio (Kob);

t = the number of calendar days from the last “interest” day until the bond maturity date (“the interest” day is the date of coupon payment).

Coupon payments (based on exact percentages) can be determined using the formula

Where is the exact percentage coefficient (CT).

Thus, by applying the above formulas, it is possible to determine both components of bond yield: coupon payments and the difference between the redemption price and the purchase price of the bond. As a result, the amount of annual total income and total income for the entire loan term will be calculated.

Bond - (from the Latin obligato - obligation) a bearer security giving the owner the right to receive annual income in the form of a fixed percentage (in the form of winnings and payment of coupons). The bond is subject to redemption within the period stipulated upon issue of the loan.

In general terms, bonds are long-term debt obligations with a fixed interest rate. There are three main categories of bonds: corporate bonds, federal government bonds (including federal agencies and agencies), and municipal bonds.

Corporate bonds are obligations of corporations to creditors to repay the amount of debt and interest on loans received on time. Like stocks, bonds are securities, but unlike stocks, which represent the equity capital of corporations, bonds are expressions of borrowed capital, that is, for the corporation they are “debt securities.” Bondholders (bondholders) are creditors of the corporation, while shareholders are its co-owners. In this regard, the rights of bondholders are different from the rights of shareholders: they do not have voting rights and cannot participate in the management of the issuing company, but at the same time it is obliged to pay interest on bonds (unlike dividends on shares, where there are no such obligations there is no corporation), and do this before considering the issue of dividends on shares. In addition, when a company is liquidated, bondholders have preferential rights over shareholders.

Bond relations are formalized by a special agreement between the issuing company and the investor (bond agreement), under the terms of which the corporation undertakes to reimburse the investor for the amount provided by it within a specified period (“maturity period” or “redemption date”), as well as during the entire period for which A bond is issued and pays interest at a specified rate. Like the shareholder, the bondholder receives the appropriate document confirming the fact of his ownership of the bonds - a bond certificate, which indicates the name of the issuing company, par value, interest rate, as well as the name of the “paying agent” for both interest and capital amount bonds (such an agent may be the issuing company itself or a bank).

Types of bonds:

1. Coupon bonds or bearer bonds.
They are accompanied by special coupons, which must be issued twice a year and presented to the paying agent for payment of interest. In fact, a coupon is a kind of promissory note payable to bearer. These bonds are convertible and the coupon and certificate act as title to the property. Because these bonds are issued to bearer, the corporation does not record who owns them. Although they are no longer in print, older issues are still circulating on the market

2. Registered bonds. Most corporate bonds are registered in the name of their owner, and he is issued a personal certificate. These bonds have no coupons and interest payments are made by the paying agent according to a set schedule. When selling or exchanging registered bonds, the old certificate is canceled and a new one is issued, indicating the new owner of the bonds.

3. “Balance sheet” bonds. This type of bonds is becoming increasingly widespread, since their issue does not involve such formalities as the issuance of certificates, etc. : simply all the necessary data about the bondholder is entered into the computer.

Depending on the security, bonds are divided into:

1. Secured bonds. These bonds are backed by real assets. They can be divided into three subtypes:

a) bonds with a pledge of property, which are secured by the fixed capital of the corporation (its real estate) and other real property;

b) bonds with a pledge of securities, which are secured by the securities of any other corporation (but not the issuing company) owned by the issuing company - usually its branch or subsidiary;

c) bonds with equipment pledged. Such bonds are usually issued by transport corporations, which use, for example, vehicles(airplanes, locomotives, etc.).

The idea behind a secured bond is that if a company goes bankrupt or becomes insolvent, the holders of the secured bonds can claim some of the company's assets.

2. Unsecured bonds. These bonds are not backed by any tangible assets, they are backed by the good faith of the issuing company, in other words, by its promise. In the event of a company bankruptcy, holders of such bonds cannot claim part of the real estate. These bonds are less reliable, but they are also subject to preferential rights in the liquidation of the company. Due to the same, the interest rate on them is higher.

3. Other types of bonds.

a) Income bonds, or reorganization bonds, provide for the payment of interest only if the corporation has substantial earnings, that is, if such bonds are issued, the repayment of its principal is guaranteed, and the payment of interest is subject to the decision of the board of directors. The issuance of such bonds is practiced when a corporation is recapitalized, usually when it faces bankruptcy.

b) Guaranteed bonds: These are not guaranteed by the issuing corporation but by other companies. They are most often used: by transport corporations, when the issuer provides its equipment to a company, and in return this company acts as a guarantor for the bonds of the first company, or by subsidiaries of large companies, when a subsidiary issues bonds, and the main enterprise acts as a guarantor. As the name implies, in the event of insolvency of the issuer, all claims of bondholders are satisfied by the guarantor.

c) Zero coupon bonds. They do not pay regular interest, but this does not mean that they do not generate income. The fact is that when issued, these bonds are sold at a discount (at a discount), and are repaid at the nominal price when the payment term arrives, and the greater the discount, the longer the period for which the bonds are issued.

Bonds are generally considered a safer investment vehicle than shares because their holders have priority in claiming a share of the company's assets in the event of its liquidation or restructuring. For issuers, bonds provide a reliable alternative to banks and other lenders, which may offer less attractive financial terms than capital markets, such as higher interest rates on borrowing.

When investing in bonds, you need to pay attention to a number of key indicators, including maturity, call conditions, credit quality, interest rates, price, yield and tax status. Taken together, these factors allow an investor to evaluate the fair value of a particular debt obligation and decide to what extent a given type of investment fits his or her investment objectives.

Maturity refers to a predetermined date in the future by which the face value of a bond must be returned to the investor. Bond maturities typically range from one year to 30 years. Maturity ranges are classified as follows:

– short-term: – up to 5 years;

– medium-term: – from 5 to 12 years;

– long-term: – from 12 years and above

Bonds provide investors with interest income, which may be fixed, variable, or payable at maturity. Most debt obligations have an interest rate that remains the same until maturity and is calculated as a percentage of the face value of the security (fixed rate). Typically, bondholders receive interest payments semi-annually.

Bonds can be of varying credit quality, from Treasuries that are fully guaranteed by the government to bonds rated below investment grade that are considered speculative.

The price of a bond is based on a large number of variables, including interest rates, supply and demand, credit quality, maturity and tax status. Newly issued bonds typically sell at or near par value. The prices of bonds traded on the secondary market fluctuate in response to changes in interest rates. If the price of a bond exceeds its face value, the bond is said to be selling at a premium; if the price is below par value, the bond is said to be selling at a discount. Treasury bonds, the primary placement of which is carried out through auction trading, are sold at a discount to par value, and they are redeemed at par value.

Nominal yield is a fixed income determined by the interest rate set for a given bond upon issue. It is also called the coupon rate. If a bond has a price of $1,000 and the coupon rate is 10%, then the investor will receive interest of $100 per year, which will be paid semi-annually at $50.

When investing in bonds, it is important to remember that investment returns come with risk. The riskier a bond is, the higher its yield tends to be because it is designed to reward the investor for taking on the risk.

Current yield is calculated by dividing the annual coupon yield by the bond's current market price. For example, if the current price is $1,000 and the coupon rate is 8% ($80 per year), the current yield is 8% ($80 divided by $1,000 and multiplied by 100%). If the bond is trading at $900 and the coupon rate is also 8% ($80 per year), then the current yield is already 8.89% ($80 divided by $900 and multiplied by 100%). The current yield on discount securities is calculated by dividing the discount by the difference between the par value and the discount.

Yield to maturity or yield to call are considered more important indicators than current yield and provide the ability to compare bonds with different maturities and coupons. The difference in the yields of two bonds is usually called the yield spread. Essentially, the yield to maturity is the discount rate at which the bond's future earnings will be equivalent to the current price.

When calculating the yield to maturity, the sum of all interest payments received by the investor from the moment of purchasing the security until the maturity date is taken into account, as well as the discount (if the bond is purchased below par) or premium (in the case of purchase above par). A bond's yield to maturity gives an idea of the real value of securities for an investment portfolio and is therefore one of the most important indicators that must be taken into account when deciding whether to purchase bonds.

It is worth noting that in modern practice, the differences between stocks and corporate bonds are gradually disappearing. On the one hand, the issue of “non-voting” shares is being legitimized, and on the other hand, “voting” bonds have appeared. The erasure of these differences is also facilitated by the issue of convertible bonds and the issuance of so-called “hybrid securities”. This phenomenon reflects, to a certain extent, the trend of merging industrial and banking capital.

2. The structure of the securities market in the Russian Federation and its main development trends. The need to create in the Russian Federation

The concept of “securities market” or “stock market” combines the relations arising during the issue and placement of securities (regardless of the type of issuer), as well as the activities of professional market participants in the subsequent circulation of securities. In the stock market, relations of property rights arise regarding the ownership and lending of specific financial instruments - securities.

The securities market, like other markets, is a complex organizational and economic system of completed technological cycles. This market includes, on the one hand, issuers (legal or individuals), issuing securities, on the other hand, investors (legal entities or individuals) buying securities, as well as intermediaries (dealers, brokers, brokers, etc.) helping to circulate securities and carry out various stock transactions.

The interaction of securities market participants is based on the interests of the three main market actors - the state, issuers and investors. It is necessary to give the general structure of the stock market, which is proposed by A.A. Kilyachkov. and L.A. Chaldaeva.

Economists distinguish between primary and secondary, exchange and over-the-counter securities markets. On the primary market, the initial release of securities into circulation (issue) occurs, and on the secondary market, various transactions are carried out with already issued securities (stock transactions). The structure of the stock market also includes industry and regional securities markets, individual markets various types securities.

Rice. 2 The place and role of the securities market in a market economy

The securities market is an effective regulator of the capital investment process, which promotes the redistribution of investment resources and ensures their concentration in the most profitable and promising industries. As a result, the economy undergoes constant structural restructuring and capital is placed mainly in industries necessary for society. Consequently, the securities market serves as the means through which the Mechanism of Capital Migration to more promising industries operates.

Thus, the main goal of the securities market is the accumulation of temporarily free financial resources and their redistribution between spheres of the economy on a commercial basis through various transactions with securities by market participants.

Let's consider the interaction of individual market entities:

1) State - issuers. The state legislatively determines the procedure for issuing, circulation and accounting of securities, the taxation system, controls the implementation of laws by market participants and the collection of taxes. The issuer places its securities in accordance with established rules. Investors are implicit participants in the state-issuer relationship, since current legislation is aimed at ensuring the rights of investors.

2) The state is investors. The state establishes legislative norms, monitors their implementation and collects taxes. Investors pay taxes, buy and sell securities, and demand that the government enforce their rights.

3) Issuers are investors. Issuers place their securities and use the collected funds to develop their business, while having certain obligations to investors. The interests of the issuer in developing the business and the interests of investors in generating income are opposite.

Ensuring the interests of all participants in the securities market requires organizing strict accounting of the actions of each of them.

At a meeting of the Subcommittee on the Stock Market on January 14, 2003, the concept of the Russian Securities Market Development Program for 2003–2010, focused on the development, primarily, regional markets securities and the introduction of a significant number of joint stock companies to these markets in the interests of attracting investments. According to calculations based on data from the Federal Securities Commission, the Central Bank of the Russian Federation, the MICEX, the RTS, the number of Moscow broker-dealers, incl. banks, accounts for 40–45% of the Russian market, their operations account for 80–90% of the turnover of the domestic stock market, while the market niche of the MICEX, RTS and MSE is more than 90% Russian market.

Among the most important trends One can also highlight changes in the infrastructure of the stock market. The infrastructure of the Russian stock market has recently improved significantly, however, positive changes may continue to occur. The trend of dominance of foreign investors in the Russian stock market will lead to the continuation of the consolidation of the financial infrastructure that began in August 1998, the consolidation of brokerage and registrar companies, the liquidation or merger of some settlement depositories, clearing centers and stock exchanges.

The main goal of the development of the Russian securities market in the next decade should be its transformation into a highly effective mechanism for the redistribution of financial resources, contributing to a significant increase in the attraction of investments by Russian recipients and reducing the cost of investment resources. It can be stated that the Russian securities market, despite all its existing shortcomings, has enormous development potential.

The state in the securities market acts as the main factor determining its development (quantitative and qualitative characteristics). The state, the largest holder and seller of securities of Russian enterprises, pursues an active policy of direct support for infrastructure projects, including participation in their financing, assistance in attracting foreign capital, etc. When implementing these projects, it must support those social forces (and specialists) that are firmly on the reformist platform. At the same time, it should be noted that the direct participation of the state in creating the infrastructure of the securities market is temporary: in the future, this function will be transferred to the participants of this market themselves.

It is possible to determine the main conditions under which the Russian securities market will be able to overcome the crisis and begin positive development:

– the functioning of the securities market will be placed under the control of the state that forms it legislative framework and monitoring its compliance;

– privatization of state property will be carried out gradually, taking into account the investment opportunities of the Russian capital market; at the same time, the destruction of productive forces will not be allowed;

– the primary task will be to revive the confidence of domestic and foreign investors in Russian securities and the banking system;

– reform of the tax system will be carried out taking into account the interests of investors, primarily in the real sector of the economy;

– an extensive training program for experienced securities market professionals will be implemented;

– will not take place mechanical use foreign experience in the development of the securities market without taking into account Russian specifics.

IN Russian Federation The government regulatory bodies for the securities market include: Federal Commission for the Securities Market (FCSM); Ministry of Finance of the Russian Federation; Central Bank of the Russian Federation; Management Committee state property RF; Antimonopoly Committee of the Russian Federation; Ministry of Taxes and Duties of the Russian Federation; Ministry of Justice of the Russian Federation; State Committee for Supervision of the Activities of Insurance Organizations, etc.

The main functions of regulatory authorities aimed at protecting investors from financial losses are: first, registration of all participants in the securities market; secondly, providing all economic entities with reliable information about the issue and circulation of securities; thirdly, control and maintenance of law and order in the securities market.

State regulation of the securities market is carried out in the form of direct intervention in its functioning, as well as in the form of measures to indirectly influence the market.

Areas of direct intervention include: legislative activities of representative authorities on securities market issues in order to create a unified legal framework ( Federal Assembly); resolutions and orders of executive authorities on the same issues (Government of the Russian Federation); measures taken by other government bodies to introduce regulations relating to the functioning of the securities market (Fe Federal Commission for the Securities Market, the Ministry of Finance of the Russian Federation, the Central Bank of the Russian Federation, the State Committee for Property of the Russian Federation, etc.).

State regulation of the securities market in the Russian Federation is carried out in accordance with the Decree of the President of the Russian Federation “On measures for state regulation of the securities market in the Russian Federation” and the Federal Law “On the securities market”. They regulate the main types of business activities of professional participants in the securities market and the main types of securities allowed for public offering; creation of the Federal Commission for the Securities Market under the Government of the Russian Federation, ensuring the implementation of a unified state policy on the securities market. The Securities Market Commission is a federal executive body for monitoring the activities of professional market participants and determining standards for issuing securities. The Federal Commission creates the necessary territorial bodies to exercise its powers. The powers of the Federal Commission do not extend to the procedure for issuing debt obligations of the Government and constituent entities of the Russian Federation.

Federal Law “On the Securities Market” April 22, 1996 No. 39-FZ as amended. Federal Law No. 176-FZ dated October 27, 2008 regulates relations arising during the issue and circulation of issue-grade securities, regardless of the type of issuer, during the circulation of other securities in cases provided for by federal laws, as well as the peculiarities of the creation and activities of professional participants in the securities market.

Section V of the Federal Law “On the Securities Market” is devoted to the procedure for regulating the securities market. According to Art. 38 of this Law, state regulation of the securities market is carried out by:

– establishing mandatory requirements for the activities of professional participants in the securities market and its standards;

– state registration of issues (additional issues) of issue-grade securities and securities prospectuses and control over compliance by issuers with the conditions and obligations stipulated therein;

– licensing the activities of professional participants in the securities market;

– creating a system for protecting the rights of owners and monitoring compliance with their rights by issuers and professional participants in the securities market;

– prohibition and suppression of the activities of persons carrying out business activities in the securities market without an appropriate license.

Chapter 11 of the Securities Law is devoted to regulating the activities of professional participants in the securities market.

For a long time (1997 – 2004), the ratio of stock market capitalization to GDP did not exceed 20%. According to the Strategy for the Development of the Financial Market of the Russian Federation for 2006-2008, approved by Decree of the Government of the Russian Federation No. 793-r dated June 1, 2006 (hereinafter referred to as the Strategy), by 2009 the ratio of capitalization to GDP should have been 70%, but already in 2007 this target was exceeded. The stock market capitalization at the end of 2007 amounted to 32.3 trillion. rubles with a GDP volume of almost 33 trillion. rubles Thus, for the first time in the history of the Russian financial market, the capitalization/GDP ratio came close to 100%. In 2007, the value of outstanding corporate bonds in relation to GDP increased to 3.7% (the Strategy target for 2008 is 4.5%. The strengthening of the role of the financial market in the economy was accompanied by an increase in exchange trading volumes, an increase in the liquidity of the Russian financial market, as well as the growing appeal of Russian companies to the stock market as a source of long-term investment.

The volume of exchange trading in shares on Russian stock exchanges in 2007 amounted to 31.4 trillion. rubles, that is, it also approached the level of GDP. Much of this growth was due to the expansion Russian companies practices of attracting investments in the stock market. This, in turn, had an even greater impact on market capitalization indicators. So, during 1997 – 2003. an increase in the market value of shares traded on the market by 90%, and sometimes by 100%, ensured an increase in the total market capitalization. In fact, there was no influx of new securities into the market. In 2006, over 30% of the growth in capitalization of the securities market was provided by new issues, and in 2007, new issues provided almost 50% of the growth in market capitalization.

As a result, for recent years The competitiveness of the Russian financial market has increased. Thus, from 2004 to 2007, the share of Russia in the total capitalization of the 48 largest financial markets in the world increased from less than 1% to 2.4%. At the same time, the ratio of transaction volumes with Russian shares in the domestic and foreign markets was almost 70% to 30% in favor of the domestic market. According to the Strategy, this proportion was expected to be achieved in 2008. Thus, the massive outflow of securities from the Russian market to foreign markets not observed. At the same time, these achievements are still extremely unstable, and competition among world financial centers for the right to organize trading in Russian assets has intensified significantly. Under these conditions, significant efforts are required to retain Russian securities on domestic trading platforms.

In 2007, the volume of issues of equity securities registered by the Federal Financial Markets Service of Russia at par value amounted to 1,889.3 billion rubles. Of these, 626.7 billion rubles were bond issues and 1,262.6 billion rubles were shares. By open subscription, shares worth 74.6 billion rubles and bonds worth 616.4 billion rubles were placed, respectively. In total, equity securities worth 691 billion rubles were placed by open subscription, which is equivalent to 10% of the amount of investment in fixed capital.

3. Problem

The following data is available.

Table 1 – Initial data

(thousand rubles)

Article	Year
Assets	1st	2nd
Cash	14850	15326
Marketable securities	61900	66530
Inventory	112640	142560
Other working capital	18690	16560
Total working capital	233080	240976
Investments	59000	63200
Real estate, machinery, equipment	1144400	1255400
Total	1436480	1559576
Liabilities
Accounts payable	85400	86120
Other current liabilities	78800	75200
Total current liabilities	164200	161320
Bond loan	424000	475000
Other long-term liabilities	91800	87300
Total long-term liabilities	515800	562300
Share capital	756480	835956
Total	1436480	1559576

Continuation of Table 1

Article	Year
Sales revenue	2150800	2253320
Other income	2400
Total income	2154200	2253890
Cost of products sold,	2059700	2134560
including depreciation	136000	134000
Earnings before taxes and interest	93500	119330
Interest expenses	25240	38640
Unforeseen expenses	18445	10456
Profit before taxes	49815	70234
Taxes	20400	29500
Net profit	29415	29500
Payment of dividends	13500	20000
retained earnings	15915	20734
Issued ordinary shares, pcs.	17100	15000
Market price per share

Calculate and analyze the following indicators:

The cost of assets per bond (the cost of one bond is 1 thousand rubles);

Earnings per ordinary share.

Earnings per share.

Coverage of dividends on ordinary shares;

Dividend payout ratio;

Interest coverage on bonds;

Return on equity;

Financial leverage;

Dividend income.

Solution

The cost of assets per bond (the cost of one bond is 1 thousand rubles) is calculated using the formula:

where A – assets of the enterprise;

OZ – the amount of the bond issue;

O – the cost of one bond.

The value of assets per common share.

where A – assets of the enterprise;

K – number of ordinary shares;