The Devil's Deal

89Very interesting, Mr Bond

amazed by Jonathan’s concise explanation of company law.

‘Shares are the opposite. Once someone has more than half of

your share capital they can pretty much do anything they like.

They own the majority of the company, so they can choose to

expand into Brazil, open a factory in India or sell your Chinese

division to the highest bidder. And get rid of the original owners

any time they like.’

I’d always believed that the Rapid Fire Round had been designed

by Jerry to remind us that Jerry was boss. But this time I was

actually learning a lot. I looked around to see that everyone else

was paying full attention. Jerry’s face, it was fair to say, was not

a picture of happiness.

‘Who are the biggest buyers of bonds?’ Jerry demanded. I looked

at Perrine. She was staring at Jonathan – stupid, oash Jonathan

Spurrier – with admiration. And he was looking right back at her,

enjoying his moment in the limelight.

‘Institutional investors like asset management rms and insurance

companies. Pension funds seem to love them.’

‘Why?’

‘Pension funds know that in thirty years their investors will

retire. So they go for bonds of the same maturity. They get back

the principal at the same time they need to make lump sum

payments to their pensioners.’

‘Why don’t they choose equities instead?’

The name’s Safety

‘Equities pay dividends but they aren’t guaranteed. If a company

has a terrible year they won’t have any prot to

pay the dividend. And it may be that management

want to keep prots to re-invest in the company.

But the coupon is guaranteed. In good years or

bad, the investor will get the coupon.’

‘‘

Equities

pay dividends

but they aren’t

guaranteed

’’