listsbsome of the pros and cons of retiring debt early

Solutions

Expert Solution

1) Ans )The act of paying off a debt completely. If one borrows a certain amount, one must eventually repay it to the lender and retire the debt.
debt retirement - Investment & Finance Definition The act of repaying debt. This may be accomplished by recalling notes and bonds that have been issued and returning the principal to those who have purchased the debt. Often debt is retired by creating a sinking fund when the debt is issued.

advantages of retiring debt early:

✓Save on interst cost
✓Save on monthly EMI further we can invest that EMI somewhere and earn an interest
✓Reductions in debt to credit ratio:it will also help in getting loans in future by improving credit scores.

Disadvantages of retiring debt early:

✓A bullet cash outflow will reduce the cash
assest we had.it will impact our ability to buy
That is not loanable

✓for retiring debit we may have to sell out some assest in wherein we are earning a higher return

Could you please thumb up if answer was helpful ? thank you

Nightingale answered 1 year ago

Next > < Previous

Related Solutions

What is the debt ceiling? When and why was it created? Discuss the pros and cons...

What is the debt ceiling? When and why was it created? Discuss the pros and cons for raising the debt ceiling.

What are the pros and cons of increasing debt in a firm's capital structure? according to...

What are the pros and cons of increasing debt in a firm's capital structure? according to the recent survey of CFO's conducted by Duke University. What are two of the most important factors that American CFO's consider when deciding on the appropriate level of debt? https://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P76_How_do_CFOs.pdf

What are the most common sources of debt financing and what are their pros and cons?

Explain the pros and cons of federal debt. What specific considerations suggest that federal debt should...

Explain the pros and cons of federal debt. What specific considerations suggest that federal debt should be reduced? What specific considerations suggest that increasing the federal debt is acceptable? From a Christian worldview, what action should government take with respect to the federal debt? Be specific.

DB Mergers and Acquisitions: Pros and Cons A look at the pros and cons of mergers...

DB Mergers and Acquisitions: Pros and Cons A look at the pros and cons of mergers Are mergers in the public interest or are mergers just beneficial for top executives and shareholders? Provide an example of a recent corporate merger and discuss how that merger affected competition, economies of scales, consumer prices, and consumer choice.

A Detailed Pros and Cons analysis with at least 7 Pros and 5 Cons of the...

A Detailed Pros and Cons analysis with at least 7 Pros and 5 Cons of the Strategic Action. This section should lead with statement that, describes what the strategic action is, what primary level or secondary level strategy the action is meant to achieve, and how that fits with the firm’s Generic Strategy. Then the Pros and Cons will help you evaluate how well the strategic action fulfills the strategy. The pros and cons should not be vague positives from...

Discuss the pros and cons (3 pros and 3 cons) of raising the Minimum Wage to...

Discuss the pros and cons (3 pros and 3 cons) of raising the Minimum Wage to double digits. You must conclude with which side you are on and defend your choice.

Discuss the pros and cons of creating shareholder value. Discuss the pros and cons of Market...

Discuss the pros and cons of creating shareholder value. Discuss the pros and cons of Market Capitalization, Discuss the pros and cons of market indexes market indexes such as the(Research each term via the Internet and determine which stock exchange they follow) S&P 500, The DJIA, DAX, CAC-40, NASD 1000, and the FTSE-100. Finally, research and discuss the major differences between the New York Stock Exchange (NYSE) and NASDAQ.

Discuss pros and cons of debt financing in contrast to equity financing in capital budgeting. What...

Discuss pros and cons of debt financing in contrast to equity financing in capital budgeting. What are the implications of each for shareholders’ wealth maximization?

Identify 3 pros and 3 cons of localization and standardization and explain why they are pros/cons....

Identify 3 pros and 3 cons of localization and standardization and explain why they are pros/cons. Give 2 examples of products that are better off with Standardization and 2 that are better off with Localization and explain why?

Subjects