|
|
Redemption |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
RedemptionThe process of canceling a defeasable title to land, such as is created by a mortgage foreclosure or tax sale.RedemptionThis is the right of the mortgagor to recover mortgaged property on repayment of the loan and any interest due. This legally means that once you as the borrower have finished repaying the mortgage you took out, the property is yours and the lender has no further claim on it. If you pay of the mortgage ahead of schedule you may face a redemption penalty which compensates the lender for loss of interest.RedemptionThe re-purchase of a security, such as a bond or preferred stock, by the issuing company at or before maturity.RedemptionRepayment of a debt security or preferred stock issue, at or before maturity, at par or at a premium price.Redemption Similar MatchesRight of redemptionRight of redemptionThe right to recover property that has been attached by paying off the debt . Redemption statementRedemption statementThe outstanding amount to be repaid on an existing mortgage. Redundancy insurance Another form of income protection, but one that does not cover any form of sickness, injury or disability. The purpose of this type of policy is to replace income lost through a short to medium term period of redundancy. It provides you with a monthly tax-free income to cover a portion of your lost earnings. It is often sold in conjunction with the accident, sickness and disability element of income protection policies, in which case it is known as Accident, Sickness and Unemployment (ASU). Right of redemptionRight of redemptionThe right to recover property forfeited by foreclosure by paying the outstanding principal owed plus interest. Redemption priceRedemption priceSee: Call price Redemption yieldRedemption yieldYield calculations on bonds aim to show the return on a gilt or bond as a percentage of either its nominal value or its current price. There are three types of yield calculation that are commonly used:Nominal YieldThis is calculated by dividing the annual income on the bond by its nominal or 'par' value. So the nominal yield on a £100 bond which pays 5% interest per year is 5/100 x 100 = 5%.Current or 'Running Yield'This is calculated by dividing the annual income on the bond by its current market price. So if the market price of the £100 bond dropped to £95, the current yield on the bond at that time would be 5/95 x 100 = 5.36%. Note that as the market price of a bond drops, its yield goes up.Redemption Yield'The Redemption Yield shows what the total return on a bond would be if held to its maturity date. It reflects not only the interest payments a bondholder will receive, but also the gain/loss he will make when it matures. The income element is the same 'current yield' calculation performed above. The gain/loss element is calculated by taking the difference between the current market price and the nominal value of the bond (e.g. in our example 100 - 95 = 5), dividing it by the number of years til maturity (assume 5 years for simplicity, so 5/5 = 1) and then dividing that figure by the current price of the bond (1/95 x 100 = 1.05%) The yield to redemption is the sum of the current yield (5.36%) and the capital yield (1.05%) = 6.41%. Further Suggestionsredemption feesRedemption Period Redemption charge Redemption penalties redemption date Redemption fee Redemption date Redemption cushion redemption price Overhanging redemption penalty Preferred equity redemption stock (PERC) Serial redemption Redemption penalty overhang Mandatory redemption schedule gross redemption yield Extended redemption penalty |
|
|
|