Define embedded rate (for debt)

Q: What does Total debt include?

A: Answer: Generally, debt is an obligation imposed upon a corporation to manage its business. Total…

Q: Give an example of a debt ratio?

A: Companies’ capital structure may contain debt and equity. It is not necessary for any company to…

Q: Distinguish between a debt security and an equity security.

A: Debt Security:    Debt security refers to a financial instrument that is issued by the organization…

Q: Define term structure of interest rates

A: The term structure of interest rates generally alluded to as the yield curve, portrays the coupon…

Q: Formula for interest rate parity?

A: Interest Rate Parity: It is the technique used to govern the relation between currency exchange rate…

Q: Explain Classifications of Debt Investments.

A: Debt securities: Debt security is money borrowed at a specific rate of interest which must be repaid…

Q: Why is the relevant cost of debt the interest rate on new debt, not that on alreadyoutstanding, or…

A: The pre-tax cost of debt for a company, rd, is the interest rate the company should settle on fresh…

Q: Explain Collateralized debt obligations?

A: Collateralized debt obligations: A collateralized debt obligation (CDOs) is a portfolio of differing…

Q: Explain The Need for an External Interest Rate?

A: There is a strong need for the external interest rate because it helps in making financial…

Q: Explain an example how to calculate debt ratio.

A: Debt Ratio: Debt ratio is the percentage of assets of the company that are procured or financed…

Q: What are the contract rate and the market rate for bonds?

A:

Q: What are Debt Instruments?

A: Answer: Debt instrument is like a tool a company may use in capital raising. It allows the holders…

Q: How is Collateralized debt obligation created. Plelase explain in details

A: Collateralized debt obligation (CDO): Collateralized debt obligation (CDO) is the bundle of loans…

Q: What is interest rate parity?

A: Interest rate parity: Interest rate parity is a theory concerning the association among spot…

Q: Define CDO, collateralized debt obligation

A: The question is based on the structure and definition of Collateralized debt obligation (CDO), the…

Q: Explain the Structuring the Payment for a Target Debt Coverage Ratio?

A: Coverage Ratios are the ratios that depict that on an average how a firm would be able to cover its…

Q: Calculate the debt ratio

A: Debt ratio is a financial ratio which is calculated by dividing the total liabilities by the total…

Q: What are the two types of debt financing?

A: Debt:   A debt is an obligation that requires on entity called the debtor to pay back a borrowed sum…

Q: Define long-term debt

A:

Q: Explain principal (debt)

A: Debt is the amount owed by the company for a particular period from the date of the company's…

Q: How is the Equivalence Calculations made with Effective Interest Rates?

A: The formula for Effective annual rate is  Where, r - rate of return n - number of compounding.…

Q: Explain Types of Debt Instruments

A: Answer: Debt instrument is like a tool a company may use in capital raising. It allows the holders…

Q: Define the term the effective interest rate covering the payment period?

A: Interest rates can be of two types- Simple interest rate- This is the interest rate stated in the…

Q: sources of financing through LO

A: Long term debt is a non current liability that is liable to be paid after one or more years.

Q: Define the term debt securities.

A: Debt security refers to a debt instrument, such as a government bond, corporate bond, certificate of…

Q: Define bonds discount and give an example.

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: Name the two types of debt financing?

A: Debt is the amount owed by the company for a particular period from the date of the company's…

Q: Explain Collateralized Debt Obligations (CDOs)?

A: A collateralized debt obligation (CDO) is a complex structured finance product that is backed by a…

Q: Explain how to account for the impairment of held-to-maturity debt security.

A: Held to maturity securities are those securities which are purchased to be held till maturity…

Q: Describe the basic methods of debt financing?

A: Every company has two major types of financing one is through raising equity shares and the other is…

Q: Explain an example how to record the purchase of debt investment.

A: When a debt investment is purchased , it is recorded as a asset in the books of the company as it is…

Q: Give some examples of debt financing?

A: Following are some examples of debt financing: Whereas, Debentures are a corporate or government…

Q: Define debt ratio

A: Ratio refers to the relationship between the two quantities which shows the quotient of one divided…

Q: Please define the “Interest Rate Parity Theorem” and explain the equation which describes it.

A: An interest rate parity theory is defined as an interest rate differential, which is between the two…

Q: instruments are often referred to as fixed income instruments. a. Debt O b. Equity O c. Fixed O d.…

A: Introduction:- Investors gets a return in the form of fixed periodic payments and also get total…

Q: What are some differences between debt-with-warrant financing and convertible debt?

A: Following are the differences between debt-with-warrant financing and convertible debt: In basic…

Q: How are Effective Interest Rates calculated?

A: Effective interest rate is the interest earned on the investment or saving account.

Q: What is the increasing-rate debt in the exposure draft, Topic 470?

A: FASB: Financial Accounting Standards Board is the regulatory body for setting accounting standards…

Q: Define current portion of long-term debt

A: Long-term debts are liabilities that is to be repayable in more than one year. Such liabilities are…

Q: Define implicit rate of interest.

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: Identify the major categories of debt financing

A: Introduction : In simple words, debt refers to the source of fund under which the company issue its…

Q: Explain in words the difference between total debt and total liabilities.

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…