Step-up (step down) notes, Financial Management

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.  

Posted Date: 9/8/2012 5:05:20 AM | Location : United States







Related Discussions:- Step-up (step down) notes, Assignment Help, Ask Question on Step-up (step down) notes, Get Answer, Expert's Help, Step-up (step down) notes Discussions

Write discussion on Step-up (step down) notes
Your posts are moderated
Related Questions
Q. Explain Compound Value of an Annuity? Compound Value of an Annuity: - Annuity demotes to the periodic flows of equal amounts. FV = A {(1+i)n - 1}/i Instance: - Mr. X i

To begin this topic, the case of China Sky describes the appointment of a special auditor  in the organization that is also a rule in the procedures of Singapore Exchange (SGX). Th

The financial ratios of a firm are given:     Current ratio    =  1.33   Acid-test ratio   =  0.80   Current liabilities  = 40,000   Inventory turnover ratio = 6    What is the

To determine Henkel's corporate beta, unlever (and relever) the ordinary least squares (OLS) market betas for each company in the European Household and Personal Care segment. Pric

Long- T er m Debt Long-term debt is a debt obligation that has a maturity from the date the obligation was incurred of more than one year. The debt obligation com

The Chinese Pension Fund System Mainland China has a rapidly aging population. This is attributable to two main factors - the one-child policy plus substantial improvements in l

Q. How will you conclude the cost of capital from different sources? Ans. Implication of Cost of Capital: - Cost of capital of a firm is the least rate of return expected by it

Q. What do you mean by Treasury Bills? Treasury bills (TBs) are short-term government securities. The usual practice in India is to sell treasury bills at a discount and redeem

Company capacity to continue trading Given the preceding discussion it is unlikely that the business can continue in its current form. The trading performance is clearly very

What are the Characteristics of the financing decision There are two characteristics of the financing decision. First, theory of capital structure which illustrates theore