Learning objectives of this chapter include: Define public debt; describe salient characteristics of the size, composition, and nature of public debt in South Africa; explain and compare different theories of public debt and evaluate them critically; argue the relative merits of debt and tax financing of government expenditure; define public debt management; identify and describe the different types of public debt cost; identify the goals of public debt management and discuss their pursuance, with special reference to South Africa.
A well-functioning public sector that delivers quality public services consistent with citizen preferences
and that fosters private market-led growth while managing fiscal resources prudently is
considered critical to the World Bank’s mission of poverty alleviation and the achievement of
the Millennium Development Goals.
One of the basic building blocks for managing a successful treasury department
is the establishment of a comprehensive set of treasury policies. Such
policies define the principal financial risks a company is facing and how these
risks will be managed by the treasury department. Chapter 1 covers the process
of identifying and measuring these risks.
The World Bank (WB) and the International Monetary Fund (IMF), as the leading lending agencies, have been under mounting pressure to deal with a wide range of debt sustainability challenges. The challenges have refused to subside. Instead they continue to stimulate urgent need for a new debt sustainability framework and debt management orientation that can allow for the borrowing economies to break the vicious circle of unending distress.
Managers are naturally inclined to act in their own best interests. But the following factors affect managerial behavior: Managerial compensation plans, Direct intervention by shareholders, The threat of firing, The threat of takeover. Shareholders versus Creditors
Shareholders (through managers) could
take actions to maximize stock price
that are detrimental to creditors.
In the long run, such actions will raise
the cost of debt and ultimately lower
In banking, especially in risk management, portfolio management, and structured ﬁnance, solid quantitative know-how becomes more and more important. We had a two-fold intention when writing this book: First, this book is designed to help mathematicians and physicists leaving the academic world and starting a profession as risk or portfolio managers to get quick access to the world of credit risk management. Second, our book is aimed at being helpful to risk managers looking for a more quantitative approach to credit risk. ...
• Permanent Assets (those held 1 year)
– should be financed with permanent and
spontaneous sources of financing.
• Temporary Assets (those held
• Permanent Financing
– intermediate-term loans, long-term debt,
preferred stock, common stock
• Spontaneous Financing
– accounts payable that arise spontaneously
in day-to-day operations (trade credit,
wages payable, accrued interest and taxes)
• Short-term financing
– unsecured bank loans, commercial paper,
loans secured by A/R or inventory...
In general, the intrinsic value of an asset = the present value of the stream of expected cash flows discounted at an appropriate required rate of return.
it’s like common stock - no fixed maturity.
technically, it’s part of equity capital.
it’s like debt - preferred dividends are fixed.
missing a preferred dividend does not constitute default, but preferred dividends are cumulative.
Bonds pay fixed coupon (interest) payments at fixed intervals (usually every 6 months) and pay the par value at maturity.
Debentures - unsecured bonds.
Subordinated debentures - unsecured “junior” debt.
Mortgage bonds - secured bonds.
Zeros - bonds that pay only par value at maturity; no coupons.
Junk bonds - speculative or below-investment grade bonds; rated BB and below. High-yield bonds.
Eurobonds - bonds denominated in one currency and sold in another country. (Borrowing overseas).
example - suppose Disney decides to sell $1,000 bonds in France. These are U.S.
Advances in Quantitative Analysis of Finance and Accounting is an annual
publication designed to disseminate developments in the quantitative analysis
of finance and accounting. The publication is a forum for statistical and
quantitative analyses of issues in finance and accounting as well as applications
of quantitative methods to problems in financial management, financial
accounting, and businessmanagement.The objective is to promote interaction
between academic research in finance and accounting and applied research in
the financial community and the accounting profession....
At the InCharge Debt Solutions, we believe you can achieve financial wellness by learning simple, proven strategies to paying off debt, improving your credit history and saving. We have developed Credit Booster to be a tool you can use to guide these activities. Best wishes to those of you who have taken on the challenge to manage their financial future in this positive, dedicated manner. Thank you for allowing InCharge to be your guide on this rewarding journey. All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or...
“If you work in technology, you’re probably familiar with terms like ‘technical debt.’ The metaphor seems easy, but using it to influence change can be remarkably hard. To do that, you’re going to want to present options to decision makers, backed up by evidence. I’ve been impressed watching Chris Sterling research and refine his work in just this area for several years, and I’m pleased to see him release it as a book.
Shipping imperfect software is like going into debt. When you incur debt, the illusion of doing things faster can lead to exponential growth in the cost of maintaining software. Software debt takes five major forms: technical, quality, configuration management, design, and platform experience. In today’s rush to market, software debt is inevitable. And that’s okay—if you’re careful about the debt you incur, and if you quickly pay it back.
Bài giảng Management theory and practice Financial: Chapter 12 với các nội dung cơ bản như: Overview and preview of capital
structure effects; Business versus financial risk; The impact of debt on returns; Capital structure theory, evidence, and implications for managers;... Mời các bạn cùng tìm hiểu và tham khảo nội dung thông tin tài liệu.
After studying chapter 15, you should be able to: Explain how a firm creates value, and identify the key sources of value creation; define the overall “cost of capital” of the firm, calculate the costs of the individual components of a firm’s overall cost of capital: cost of debt, cost of preferred stock, and cost of equity;...
In chapter 20, we examine the major long-term securities issued by firms to provide for their long-term financing needs – long-term debt (bonds), preferred stock, and common stock – and evaluate their features. Also, in the Appendix to this chapter we analyze the potential profitability of a company refunding (replacing) an existing bond issue with a new one.
In this chapter we examine various types of term debt as well as lease financing. After studying chapter 21, you should be able to: Describe various types of term loans and discuss the costs and benefits of each; explain the nature and the content of loan agreements, including protective (restrictive) covenants; discuss the sources and types of equipment financing; understand and explain lease financing in its various forms.
The State Records Management Act (Government Code, Section 14740-14774)
requires the Director of the Department of General Services (DGS) to establish and
administer the state’s records management program. The program applies “… to the
creation, utilization, maintenance, retention, preservation, and disposal of state
records.” DGS administers the program though the State Administrative Manual (SAM),
Chapter 1600 and the California Acquisition Manual (CAM).
Chapter 11 - Sources of long-term finance: Debt. In this chapter, you will learn: Explain the general characteristics of long-term debt, identify and explain the features of the main types of long-term loans, identify and explain the features of the main types of marketable long-term debt securities,...