Participating bond. Comparable to an income bond inasmuch as the return to the holder in
interest depends on the extent of the revenues so applicable. The first bonds to bear this name
were issued in 1902 and were designated "4 per cent and participating bonds." These bonds were
in effect collateral as well as income bonds. The company which issued the bonds owned stock in
another company and this stock was deposited and pledged as security for the principal of the
bonds. Interest at 4 per cent was guaranteed by the company which issued the bonds and the
bonds were also entitled to receive interest in excess of 4 per cent as permitted by the dividends
paid on the stock securing the bonds beyond the amount necessary first to provide for the 4 per
cent as guaranteed.
interest depends on the extent of the revenues so applicable. The first bonds to bear this name
were issued in 1902 and were designated "4 per cent and participating bonds." These bonds were
in effect collateral as well as income bonds. The company which issued the bonds owned stock in
another company and this stock was deposited and pledged as security for the principal of the
bonds. Interest at 4 per cent was guaranteed by the company which issued the bonds and the
bonds were also entitled to receive interest in excess of 4 per cent as permitted by the dividends
paid on the stock securing the bonds beyond the amount necessary first to provide for the 4 per
cent as guaranteed.
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