Term
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Definition
| A series of equal cash flows at fixed intervals. 655 |
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Term
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Definition
| A form of an interest-bearing note used by corporations to borrow on a long-term basis. 650 |
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Term
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Definition
| The contract between a corporation issuing bonds and the bondholders. 652 |
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Term
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Definition
| The balance of the bonds payable account (face amount of the bonds) less any unamortized discount or plus any unamortized premium. 662 |
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Term
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Definition
| The periodic interest to be paid on the bonds that is identified in the bond indenture; expressed as a percentage of the face amount of the bond. 653 |
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Term
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Definition
| The interest deducted from the maturity value of a note or the excess of the face amount of bonds over their issue price. 574, 653 |
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Term
| Effective interest rate method |
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Definition
| The method of amortizing discounts and premiums that provides for a constant rate of interest on the carrying amount of the bonds at the beginning of each period; often called simply the "interest method." 659 |
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Term
| Effective rate of interest |
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Definition
| The market rate of interest at the time bonds are issued. 653 |
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Term
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Definition
| The estimated worth in the future of an amount of cash on hand today invested at a fixed rate of interest. 653 |
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Term
| Held-to-maturity securities |
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Definition
| Investments in bonds or other debt securities that mangement intends to hold to their maturity. 666 |
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Term
| Number of times interest charges are earned |
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Definition
| A ratio that measures creditor margin of safety for interest payments, calculated as income before interest and taxes divided by interest expense. 668 |
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Term
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Definition
| The excess of the issue price of a stock over its par value or the excess of the issue price of bonds over their face amount. 574, 653 |
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Term
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Definition
| The estimated worth today of an amount of cash to be received (or paid) in the future. 653 |
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Term
| Present value of an annuity |
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Definition
| The sum of the present values of a series of equal cash flows to be received at fixed intervals. 655 |
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Term
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Definition
| A fund in which cash or assets are set aside for the purpose of payuing the face amount of the bonds at maturity. 662 |
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