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Financial Terms | |
Original issue discount debt (OID debt) |
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Definition of Original issue discount debt (OID debt)Original issue discount debt (OID debt)debt that is initially offered at a price below par.
Related Terms:Accretion (of a discount)In portfolio accounting, a straight-line accumulation of capital gains on discount ad hoc discounta price concession made under competitive pressure (real or imagined) that does not relate to quantity purchased ADF (annuity discount factor)the present value of a finite stream of cash flows for every beginning $1 of cash flow. Allowance for bad debtsAn offset to the accounts receivable balance, against which Avoidable costsCosts that are identifiable with and able to be influenced by decisions made at the business Bad debtAn account receivable that cannot be collected. Bad debtsThe amount of accounts receivable that is not expected to be collected. ![]() bad debtsRefers to accounts receivable from credit sales to customers Bank discount basisA convention used for quoting bids and offers for treasury bills in terms of annualized Bellwether issuesRelated:Benchmark issues. Benchmark issuesAlso called on-the-run or current coupon issues or bellwether issues. In the secondary Cash discountAn incentive offered to purchasers of a firm's product for payment within a specified time Cheapest to deliver issueThe acceptable Treasury security with the highest implied repo rate; the rate that a constant-growth dividend discount modelVersion of the dividend discount model in which dividends grow at a constant rate. Continuous DiscountingThe process of calculating the present value of a stream of future cost avoidancethe practice of finding acceptable alternatives Cost of DebtThe cost of debt (bonds, loans, etc.) that a company is charged for Current-coupon issuesRelated: Benchmark issues Current issueIn Treasury securities, the most recently auctioned issue. Trading is more active in current DebtMoney borrowed. DebtBorrowings from financiers. DebtFunds owed to another entity. Debt capacityAbility to borrow. The amount a firm can borrow up to the point where the firm value no Debt CapacityAn assessment of ability and willingness to repay a loan from anticipated future cash flow or other sources. Debt (Credit Insurance)Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. debt may or may not be secured. Debt displacementThe amount of borrowing that leasing displaces. Firms that do a lot of leasing will be Debt/equity ratioIndicator of financial leverage. Compares assets provided by creditors to assets provided Debt/Equity RatioA comparison of debt to equity in a company's capital structure. Debt FinancingRaising loan capital through the creation of debt by issuing a form of paper evidencing amounts owed and payable on specified dates or on demand. Debt instrumentAn asset requiring fixed dollar payments, such as a government or corporate bond. Debt InstrumentAny financial asset corresponding to a debt, such as a bond or a treasury bill. Debt leverageThe amplification of the return earned on equity when an investment or firm is financed Debt limitationA bond covenant that restricts in some way the firm's ability to incur additional indebtedness. Debt marketThe market for trading debt instruments. Debt ratioTotal debt divided by total assets. Debt RatioThe percentage of debt that is used in the total capitalization of a Debt reliefReducing the principal and/or interest payments on LDC loans. Debt securitiesIOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and Debt SecurityA security representing a debt relationship with an enterprise, including a government Debt serviceInterest payment plus repayments of principal to creditors, that is, retirement of debt. Debt-service coverage ratioEarnings before interest and income taxes plus one-third rental charges, divided Debt service parity approachAn analysis wherein the alternatives under consideration will provide the firm Debt swapA set of transactions (also called a debt-equity swap) in which a firm buys a country's dollar bank debt-to-equity ratioA widely used financial statement ratio to assess the Debtor in possessionA firm that is continuing to operate under Chapter 11 bankruptcy process. Debtor-in-possession financingNew debt obtained by a firm during the Chapter 11 bankruptcy process. DebtorsSales to customers who have bought goods or services on credit but who have not yet paid their debt. Deep-discount bondA bond issued with a very low coupon or no coupon and selling at a price far below par DiscountReferring to the selling price of a bond, a price below its par value. Related: premium. DiscountThe percentage amount at which bonds sell below their par value. Also the percentage amount at which a currency sells on the forward market below its current rate on the spot market. Discount bonddebt sold for less than its principal value. If a discount bond pays no interest, it is called a Discount BondA bond with no coupons, priced below its face value; the return on this bond comes from the difference between its face value and its current price. Discount curveThe curve of discount rates vs. maturity dates for bonds. Discount factorPresent value of $1 received at a stated future date. discount factorPresent value of a $1 future payment. Discount periodThe period during which a customer can deduct the discount from the net amount of the bill discount ratethe rate of return on investment that would be required by a prudent investor to invest in an asset with a specific level risk. Also, a rate of return used to convert a monetary sum, payable or receivable in the future, into present value. Discount rateThe interest rate that the Federal Reserve charges a bank to borrow funds when a bank is Discount RateThe rate of interest used to calculate the present value of a stream discount ratethe rate of return used to discount future cash discount rateInterest rate used to compute present values of future cash flows. Discount RateThe interest rate at which the Fed is prepared to loan reserves to commercial banks. Discount RateA rate of return used to convert a monetary sum, payable or receivable in the future, into present value. Discount securitiesNon-interest-bearing money market instruments that are issued at a discount and Discount windowFacility provided by the Fed enabling member banks to borrow reserves against collateral Discount WindowThe Federal Reserve facility at which reserves are loaned to banks at the discount rate. Discounted basisSelling something on a discounted basis is selling below what its value will be at maturity, Discounted cash flowA technique that determines the present value of future cash Discounted Cash FlowTechniques for establishing the relative worth of a future investment by discounting (at a required rate of return) the expected net cash flows from the project. Discounted cash flow (DCF)Future cash flows multiplied by discount factors to obtain present values. Discounted cash flow (DCF)A method of investment appraisal that discounts future cash flows to present value using a discount rate, which is the risk-adjusted cost of capital. discounted cash flow (DCF)Refers to a capital investment analysis technique Discounted dividend model (DDM)A formula to estimate the intrinsic value of a firm by figuring the Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an DiscountingCalculating the present value of a future amount. The process is opposite to compounding. DiscountingThe process of calculating the present value of a stream of future discountingthe process of reducing future cash flows to present value amounts DiscountingCalculating the present value of a future payment. DiscountingThe process of finding the present value of a series of future cash flows. discounting is the reverse of compounding. Discounting of Accounts ReceivableShort-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable. dividend discount modelComputation of today’s stock price which states that share value equals the present value of all expected future dividends. Dividend discount model (DDM)A model for valuing the common stock of a company, based on the DLOC (discount for lack of control)an amount or percentage deducted from a pro rata share of the value of 100% of an equity interest in a business, to reflect the absence of some or all of the powers of control. DLOM (discount for lack of marketability)an amount or percentage deducted from an equity interest to reflect lack of marketability. Documented discount notesCommercial paper backed by normal bank lines plus a letter of credit from a Dual-currency issuesEurobonds that pay coupon interest in one currency but pay the principal in a different Emerging Issues Task Force (EITF)A special committee of the Financial Accounting Standards Board established to reach consensus of how to account for new and unusual financial transactions that have the potential for creating differing financial reporting practices. Emerging Issues Task Force (EITF)A separate committee within the Financial Accounting Standards Board composed of 13 members representing CPA firms and preparers of financial statements Euroequity issuesSecurities sold in the Euromarket. That is, securities initially sold to investors Firm's net value of debtTotal firm value minus total firm debt. Forward discountA currency trades at a forward discount when its forward price is lower than its spot price. fractional interest discountthe combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor. Funded debtdebt maturing after more than one year. funded debtdebt with more than 1 year remaining to maturity. Interest rate on debtThe firm's cost of debt capital. Inventory issueA transaction used to record the reduction in inventory from a location, IssueA particular financial asset. IssueWhen an item is approved and released for sale, or when a policy or sales contract is accepted. Issue AgeAge of an insured as at the policy issue date, using "age nearest" next birthday formula. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |