however i am fully prepared to own vz should it be put to me
those yields no matter what it does to their portfolio's risk profile.
With a yield in excess of 4%, Verizon has been one of the companies targeted by the bond-turned-equity investors. Now, however, I think the time has come to test whether the idea of "bond substitutes" was simply a gimmick intended to motivate people to buy stocks, or truly a place to park one's money until yields moved higher. Two things have recently occurred that, in my eyes, should push at least some of the bond-turned-equity investors back to Verizon bonds. First, since the spring of 2013, yields have risen enough that rates in excess of 5% can now be captured on parts of the yield curve. Second, Verizon recently issued a new 20-year bond.
Despite the notable rise in yields during 2013, two problems still existed that made it difficult for bond-turned-equity investors to switch back to bonds. The first is that many companies have large gaps on their yield curves, with plenty of maturities up to 10 years and additional maturities of roughly 30 years. Between 10 and 30 years, however, there is generally not a whole lot of opportunities. Second, for those companies that did have maturities in the 10- to 30-year space (such as Verizon), the bonds were trading at prices way too far over par to make them attractive options for many investors. Recently, however, I've
What strike price am i looking at? all strike prices in the money and out of the money and the various time periods