Short-term debt comes with a penalty in the cost of equity

A new study finds that investors want to be compensated, in the form of higher returns, for holding the stock of firms that have a relatively higher proportion of short-term debt, rather than long term debt

How the debt crisis of 2008-09 fueled populist politics

The economic downturn of 2008-09 has often been described as a financial-sector crisis, featuring failing banks. But it was much more than that. Many people with stagnant or dropping incomes, having borrowed to sustain their ...

New measurement suggests US undercounts people in poverty

The United States has likely been underestimating the number of people in poverty, according to a new household spending-based measurement developed by Johns Hopkins University and Bowdoin University economists. They found ...

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Debt

A debt is an obligation owed by one party (the debtor) to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.

A debt is created when a creditor agrees to lend a sum of assets to a debtor. Debt is usually granted with expected repayment; in modern society, in most cases, of the original sum plus interest.

In finance, debt is a means of using anticipated future purchasing power in the present before it has actually been earned. Some companies and corporations use debt as a part of their overall corporate finance strategy.

This text uses material from Wikipedia, licensed under CC BY-SA