Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
17 Cards in this Set
- Front
- Back
|
Coupon or stated rate |
Nominal rate |
|
|
Yield or market rate. Is the rate that exactly discounts estimated cash future payments |
Effective rate |
|
|
Difference between effective interest and nominal interest |
Premium or discount amortization |
|
|
Is equal to the pv of the principal bond liability plus the present value of future interest payments using the effective or market rate of interest |
Market price or issue price of bond payable |
|
|
Fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies |
Transaction costs |
|
|
Any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity |
Financial instrument |
|
|
Any liability that is a contractual obligation |
Financial liability |
|
|
Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities |
Equity instrument |
|
|
A financial instrument that contains both a liability and an equity element from the perspective of the issuer |
Compound financial instrument |
|
|
Are granted to enable the holders to acquire equity shares at a specified price |
Share warrants |
|
|
Are those which give the holders the right to convert their bondholdings into share capital or other securities |
Convertible bonds |
|
|
An unconditional promise in writing made by one person to another |
Promissory note |
|
|
Is equal to the present value of the future cash payment to settle the note payable |
Fair value of the note payable |
|
|
Is the discounted amount of the future cash outflow in settling the note payable using the MARKET RATE OF INTEREST |
Present Value |
|
|
Difference between the cash price and the face of the note issued. Is based on the sound philosophy that no lender would part away with his money or property interest-free |
Imputed interest |
|
|
Risk that the issuer of the liability would cause a financial loss to the other party by failing to discharge the obligation |
Credit risk |
|
|
Is a situation where the creditor, for economic or legal reasons related to the debtor's financial difficulties, grants to the debtor concession that would not otherwise be granted in a normal business relationship |
Debt restructuring |
