call provision

Examples of call provision in the following topics:

• Call Provisions

  • In other words, on the call date, the issuer has the right, but not the obligation, to buy back the bonds from the bond holders at a defined call price.
  • Call dates are the dates on which callable bonds can be redeemed early.
  • A European callable has only one call date.
  • An American callable can be called at any time until the maturity date.
  • Price of callable bond = Price of straight bond – Price of call option

• Sinking Funds

  • Sinking fund provision of the corporate bond indenture requires a certain portion of the issue to be retired periodically.
  • Issuers may either pay to trustees, which in turn call randomly selected bonds in the issue, or, alternatively, purchase bonds in open market, then return them to trustees.
  • The firm may repurchase a fraction of outstanding bonds at a special call price associated with the sinking fund provision (they are callable bonds).
  • A less common provision is to call for periodic payments to a trustee, with the payments invested so that the accumulated sum can be used for retirement of the entire issue at maturity: instead of the debt amortizing over the life, the debt remains outstanding and a matching asset accrues.
  • Therefore, if interest rates fall and bond prices rise, a firm will benefit from the sinking fund provision that enables it to repurchase its bonds at below-market prices.

• Introduction to Microeconomics

  • The study of ways that humans deal with these issues and challenges is called "economics. "
  • The evolution of processes to solve the provisioning problem takes place in a social context.
  • An alternative perspective is the social context of provisioning.

• The Bipartisan Campaign Reform Act of 2002

  • Provisions of the legislation were challenged as unconstitutional by a group of plaintiffs led by then–Senate Majority WhipMitch McConnell .
  • On December 10, 2003, it issued a complicated decision that upheld the key provisions of McCain-Feingold.
  • One immediately recognizable impact was the so-called "Stand By Your Ad" provision.
  • The provision requires all U.S. political candidates and parties to identify themselves and state that they have approved a particular communication, i.e.
  • Observers argue that the Court's exemption effectively nullifies those provisions of the Act, but the full impact of Wisconsin Right to Life remains to be seen.

• Recognizing Notes Receivable

  • We also call these adjustments 'accrued revenues' because the revenues must be recorded.
  • The first method is the allowance method, which establishes a contra-asset account, allowance for doubtful accounts, or bad debt provision, that has the effect of reducing the balance for accounts receivable.
  • The amount of the bad debt provision can be computed in two ways, either (1) by reviewing each individual debt and deciding whether it is doubtful (a specific provision); or (2) by providing for a fixed percentage (e.g. 2%) of total debtors (a general provision).
  • The change in the bad debt provision from year to year is posted to the bad debt expense account in the income statement.
  • The two methods are not mutually exclusive, and some businesses will have a provision for doubtful debts, writing off specific debts that they know to be bad (for example, if the debtor has gone into liquidation. )

• Provisions of Preferred Stock

  • Preferred stock shareholders already have rights to dividends before common stock shareholders, but cumulative preferred shares contain the provision that should a company fail to pay out dividends at any time at the stated rate, then the issuer will have to make up for it as time goes on.
  • Often times companies will keep the right to call or buy back preferred shares at a predetermined price.
  • Describe in detail the different types of provisions for preferred stock

• Activities to Manage Receivables

  • In most business entities, accounts receivable is typically executed by generating an invoice and either mailing or electronically delivering it to the customer, who, in turn, must pay it within an established time-frame, called credit terms or payment terms.
  • The first method is the allowance method, which establishes a contra-asset account, allowance for doubtful accounts, or bad debt provision, that has the effect of reducing the balance for accounts receivable.
  • The amount of the bad debt provision can be computed in two ways, either (1) by reviewing each individual debt and deciding whether it is doubtful (a specific provision) or (2) by providing for a fixed percentage (e.g. 2%) of total debtors (a general provision).
  • The change in the bad debt provision from year to year is posted to the bad debt expense account in the income statement.

• Dealing with Foreign Currency and Bad Debts

  • The receivables owed by the company's customers are called trade receivables.
  • The first method is the allowance method, which establishes a contra-asset account, allowance for doubtful accounts, or bad debt provision, that has the effect of reducing the balance for accounts receivable.
  • The amount of the bad debt provision can be computed in two ways: either by reviewing each individual debt and deciding whether it is doubtful (a specific provision), or by providing for a fixed percentage (e.g. 2%) of total debtors (a general provision).
  • The change in the bad debt provision from year to year is posted to the bad debt expense account in the income statement .

• Defining Accounts Receivable

  • In turn, the customer must pay the invoice within an established timeframe, which is called the credit terms or payment terms.
  • The receivables owed by the company's customers are called trade receivables.
  • The amount of the bad debt provision can be computed in two ways:
  • By reviewing each individual debt and deciding whether it is doubtful (a specific provision)
  • By providing for a fixed percentage (e.g. 2%) of total debtors (a general provision)

• The Robinson Crusoe Example

  • Robinson Crusoe was confronted with the problems of allocation and provisioning.
  • His choice about which things to salvage (he cannot get all of the resources of the ship to shore on makeshift rafts) is partly an allocation problem and partly provisioning.
  • They have a different social structure and their approach to provisioning and the allocation problem is different.
  • His English education, beliefs, training as a sailor and the tools he saved are part of his provisioning process; he salvaged a good deal of the infrastructure of the British society.
  • The sacrifice of coconuts is called "opportunity cost."