0
What is a debt instrument where the return comes on the interest rate paid on the loan?
Wiki User
∙ 11y ago
Wiki User
∙ 11y ago
Add your answer:
Earn +20 pts
What if you leave for India from US with a credit card debt and then return after 5 years?
You will have to pay the debt + interest on your return to the US assuming the debt collectors have not chased you down in India already.
What are the advantages and disadvantages of financial leverage?
A major advantage is optimization of shareholders' wealth through mix of debt and equity, taking advantage of the U.S. tax system which favors debt financing by making interest deductible from income when calculating the company's federal tax liability. Low cost debt, especially when interest is low, would increase the return of equity relative to the return of assets. A disadvantage would be if the debt becomes too costly, it reduces the return of equity below the return of assets. Companies that are highly leverage in this case might find it difficult to make payments on their debt in times of trouble and also difficult to obtain additional financing from lenders.
If one collection agency buys your debt and charges interest and then sells it to another debt collector can that new debt collector collect on the old interest?
Yes. The new debt collector bought the entire debt, including interest that was added on. You will be responsible for the entire debt.
Why is it advisable to consolidate debt for a credit card?
It is wise to consolidate debt for credit cards when the debt is at a high interest rate, a person may take all the high interest rate debt and combine it into one debt with a lower interest rate to save money.
When does interest stop accumulating for a debt owed to an estate by an heir?
Interest on a debt is not going to stop accumulating for a debt owed to an estate by an heir until the debt is paid off. Perhaps selling the estate will help the heir pay the debt off and stop the interest accumulation.
What if you leave for India from US with a credit card debt and then return after 5 years?
You will have to pay the debt + interest on your return to the US assuming the debt collectors have not chased you down in India already.
What will an investor receives who waits until a debt instrument fully matures?
The investors who keep the investment until the debt instrument matures will receive the market rate of interest on their investment from the date of purchase.
Why do you think a debt instrument is changed periodically based on some market interest rate?
Depository Institutions: Activities and Characteristics
When you take a business bad debt on your tax return can you include the interest accumulated during the years?
Only if you included the interest as income in a previous year.
Can a debt collector charge you more than your original debt in Texas?
Only if interest is provided for in the instrument creating the debt. If the creditor tries to charge interest to which a debtor did not agree, then that constitutes usury and can, in some instances, wipe out the debt altogether. In some states, the creditor may be entitled to collection costs. ==Additional Information== If the debt collector is collecting on a money judgment rendered by a court post judgment interest accrues and can considerably increase the amount of the debt.
What is floating interest?
It is also called variable rate or adjustable rate. It does not have a fixed interest rate over the life of any of these debt instrument: loan, bond, mortgage, or credit.
What is the major function of a Bond in commerce?
A bond is an instrument of indebtedness of the bond issuer to the holders. The issuer owes the holders a debt and pays them interest.
Should the valuation of accrued interest include settlement days?
Debentures can be given in many ways. A debenture is a debt instrument,which is not backed by collaterals.
What is the difference between bond and debenture?
BONDS DEBENTURES *bonds are more secure . * It is UN secure loan you offer to a company *bonds are non convert able * easy conferable . . * low interest paid to BH. * higher interest to DH. * Issued by public companies * Issued by private sector . * bond is long term debt instrument . * short term debt instrument .
What are the advantages and disadvantages of financial leverage?
A major advantage is optimization of shareholders' wealth through mix of debt and equity, taking advantage of the U.S. tax system which favors debt financing by making interest deductible from income when calculating the company's federal tax liability. Low cost debt, especially when interest is low, would increase the return of equity relative to the return of assets. A disadvantage would be if the debt becomes too costly, it reduces the return of equity below the return of assets. Companies that are highly leverage in this case might find it difficult to make payments on their debt in times of trouble and also difficult to obtain additional financing from lenders.
What is Debenture Redemption Reserve?
Debenture is a debt instrument to raise funds. It has a maturity period associated with it. At the end of the maturity, the company(borrower) should return the interest and principal amount. Debenture Redemption Reserve is an amount kept as reserve for paying the debenture holder at the end of the maturity period.
If one collection agency buys your debt and charges interest and then sells it to another debt collector can that new debt collector collect on the old interest?
Yes. The new debt collector bought the entire debt, including interest that was added on. You will be responsible for the entire debt.
