Debt financing is the process where a firm sells bonds, bills, notes or other promises to reply to individuals or institutions in order to raise capital. In exchange lending money, those individuals and institutions agree to be creditors, and expect to be paid the principal and interest.
Debt financing is opposed to raising capital through equities market or public issues, or equity financing, which reflects an exchange of ownership in the firm in exchange of financing, and does not come with an explicit promise to repay.
Advantages and Disadvantages
Unlike the equity market, debt financing allows a firm to raise capital without having to sell shares to investors, diluting the firmâ??s ownership. Debt financing tends to appeal to smaller businesses which have a harder time finding equity financing or simply wish not to relinquish control of their company. However, the amount of capital a firm may raise through debt financing is, on average, usually lower than through equity markets, and depends heavily on whether potential creditors are willing to provide loans.
Debt instrument
A written, or otherwise recorded promise to repay. Debt instruments enable the issuer to raise capital, by establishing terms attractive to suppliers of capital to invest. Debt instruments typically state a repayment schedule, establish a interest rate on outstanding debt, and explicitly state the issuer's obligation to repay.
Standardize debt instruments make issuing, purchasing and transfering these obligations easy. Such added liquidity makes the purchase and issuance of debt more attractive, since purchases gain confidence that they may trade their debt easily in the market, and issuers may be confident that can find a purchasers of their new debt.
source: gocurrency
February 16, 2009
Amortization
The gradual elimination of debt in regular payments over time.
This is a specified time period and a constant payment amount at each interval. This amount must be high enough to cover both principal and interest. Another definition of amortization is similar to depreciation. This is the deduction of capital expenses over time, as a method of measuring the consumption of the value of long-term assets, such as equipment or buildings. Because this time period is in effect the life of the asset, it is also a specified time period. The period as a whole is known as the amortization term. It is often pattern of payments is organized in what is known as an amortization schedule, which is a table detailing the payments made and anticipated, in terms of date and amounts.
Amortization method
A distribution calculation method for making penalty-free early withdrawals from retirement accounts. An assumed earnings rate is applied over the duration of the individual's life expectancy, while the life expectancy is determined using IRS tables. Generally, the rate must be within 120% of the applicable federal long-term rate. Once the rate is determined, the withdrawal remains fixed each year.
source: gocurrency
This is a specified time period and a constant payment amount at each interval. This amount must be high enough to cover both principal and interest. Another definition of amortization is similar to depreciation. This is the deduction of capital expenses over time, as a method of measuring the consumption of the value of long-term assets, such as equipment or buildings. Because this time period is in effect the life of the asset, it is also a specified time period. The period as a whole is known as the amortization term. It is often pattern of payments is organized in what is known as an amortization schedule, which is a table detailing the payments made and anticipated, in terms of date and amounts.
Amortization method
A distribution calculation method for making penalty-free early withdrawals from retirement accounts. An assumed earnings rate is applied over the duration of the individual's life expectancy, while the life expectancy is determined using IRS tables. Generally, the rate must be within 120% of the applicable federal long-term rate. Once the rate is determined, the withdrawal remains fixed each year.
source: gocurrency
Know About the Importance of Google Adsense
"for me, i was so happy that adsense gives a lot of help to me. (Help Features Listed in). And I really appreciated it much.
From:
Andy Bustos
Credit cards and Moneymatters and Team.
About Google AdSense
Google AdSense is a program enabling online businesses to earn revenue from serving ads precisely targeted to specific web content and search pages. With service levels ranging from online sign-up to dedicated support management, a broad range of sites profit from AdSense. Thousands of Google advertisers also benefit from AdSense by gaining exposure on sites across the Google Network, which includes many of the Top 100 Media Metrix sites such as AOL, About.com, Amazon, Ask.com, and Lycos.
From:
Andy Bustos
Credit cards and Moneymatters and Team.
About Google AdSense
Google AdSense is a program enabling online businesses to earn revenue from serving ads precisely targeted to specific web content and search pages. With service levels ranging from online sign-up to dedicated support management, a broad range of sites profit from AdSense. Thousands of Google advertisers also benefit from AdSense by gaining exposure on sites across the Google Network, which includes many of the Top 100 Media Metrix sites such as AOL, About.com, Amazon, Ask.com, and Lycos.
Subscribe to:
Posts (Atom)
