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These types of securities have more than one coupon rate and each subsequent coupon rate is higher (or lower) than the previous coupon rate. For example, a 10 year step-up note (or step down note) might have a coupon rate that is 10% for the first five years and 11% (or 9%) for the last five years or, the step-up note (or step down note) could call for a 10% coupon rate for the first three years, 10.5% (or 9.5%) for the fourth and fifth year and 11% (or 9%) for the remaining five years. When there is only one change (or step up or step down) like the first example, then it is known as a single step-up note (or step down note). When there is more than one change then it is known as a multiple step-up note (or step down note) like the second example.
The ability of a firm to satisfy its debt obligations can be assessed using three sets of ratios: Short-term solvency ratios Capitalization
Q. Define Arbitrage Process ? The basic theory of the MM approach if we ignore the taxes is that the total value of a firm should be constant irrespective of the degree of leve
What are the Corporate Bonds? Corporate bonds are issued by huge corporations while they require long-term financing. They generally make interest payments double a year (sem
SUPERVALU INC . , a large US retail grocer, had $36.1 billion in sales for its fiscal year ended February 25, 2011. SUPERVALU currently reports using US GAAP. The controller of
What are "in-market" mergers? A: An in-market merger is one that occurs between two banks operating in similar geographic area, usually a city or metropolitan area. The merged in
Q. Computation of the cost of capital? Computation of overall cost of capital of the firm invoices Cost of debts: debt may be issued at par , at premium or discount it may
COMPOUNDING TECHNIQUE is the method of calculating the future values of cash flows and involves calculating compound interest. Under this process, interest is compounded when the
Discuss the risk associated with Foreign Direct Investment. How do these risks differ from those encountered in domestic investment.
(i) No External Financing: - Walter' model presume that the firm's investment are financed exclusively by retained earnings and no external financing is used. If it was therefore t
Income that is received in a fund or by company by providing a service or selling a product, but still has to be received. Mutual funds or other pooled assets that build up income
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