debt

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Related to Cost of debt: Cost of equity

Debt

Money borrowed.

Debt

Any money owed to an individual, company, or other organization. One acquires debt when one borrows money. Generally speaking, one acquires debt for a specific purpose, such as funding a college education or purchasing a house. In business and government, debt is often issued in the form of bonds, which are tradeable securities entitling the bearer to repayment at the appropriate time(s). Occasionally, especially for personal loans, debt is issued without interest or other compensation; one simply pays back what was lent. This is exceedingly rare in business and a debtor almost always compensates a creditor with a certain amount of interest, representing the time value of money. However, some areas of finance, especially Islamic banking, do not allow debt with interest.

debt

See liability.

Debt.

A debt is an obligation to repay an amount you owe. Debt securities, such as bonds or commercial paper, are forms of debt that bind the issuer, such as a corporation, bank, or government, to repay the security holder. Debts are also known as liabilities.

debt

an amount of money owed by one person, company, etc. to another. Debts result from borrowing money to purchase a product, service or financial asset (e.g. INSTALMENT CREDIT). Debt contracts provide for the eventual repayment of the sum borrowed and include INTEREST charges for the duration of the LOAN. See DEBTORS. BORROWER.

debt

an amount of money owed by a person, firm or government (the borrower) to a lender. Debts arise when individuals, etc., spend more than their current income or when they deliberately plan to borrow money to purchase specific goods, services or ASSETS (houses, financial securities, etc.). Debt contracts provide for the eventual repayment of the sum borrowed and include INTEREST charges for the duration of the loan. An individual's debt can include MORTGAGES, INSTALMENT CREDIT, BANK LOANS and OVERDRAFTS; a firm's debt can include fixed-interest DEBENTURES, LOANS, BILLS OF EXCHANGE and bank loans and overdrafts; a government's ebt can take the form of long-term BONDS and short-term TREASURY BILLS (see NATIONAL DEBT). See PUBLIC SECTOR BORROWING REQUIREMENT.

See also INTERNATIONAL DEBT.

debt

An obligation to pay another.

References in periodicals archive ?
The cost of debt affects profitability of all enterprises.
In order to test the first hypothesis, a regression model in which the cost of debt is a function of conditional conservatism, the ratio of financial expenses cover and the size of the companies is used.
Agency Cost of Debt: Agency cost of debt is narrated in the form of conflict between managers and bondholders and the conflict between shareholders and bondholders.
In words, the WACC is a weighted average of the market cost of debt and the return to equity, where the weights are the market values of the debt and equity, as percentages of the total value.
[H.sub.025] There is no significant impact of Cost of Debt of public sector companies on Long Term Debt
To demonstrate, let's assume the cost of debt remains at 7% but operating profit grows to 15%.
For the sake of brevity, let's assume that a company's cost of equity is 5 percent, and its cost of debt is 3 percent, which results in a WACC of 4 percent.
Klock, Mansi, and Maxwell (2005) find that anti-takeover provisions reduce the cost of debt financing.
A second reason why the cost of equity is typically much higher than the cost of debt is that in the event of bankruptcy of a company, debt holders are satisfied in full before equity holders receive any proceeds of liquidation whatsoever.
The purpose of this paper is to investigate whether an association exists among monitoring, debt covenants, and the cost of debt and whether it has been affected by certain provisions of the Sarbanes-Oxley Act of 2002 (hereafter SOX).
Expenditures, excluding the cost of debt servicing, in the month of January 2010 reached LL1.237 trillion while the interest rates paid on debts reached LL44.3331 billion.
Moreover, falling prices inflate the cost of debt, as real interest rates and the corresponding likelihood of default rise in unison.