Examples of debt bondage in the following topics:
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- In more recent times slavery has been outlawed in most societies, but continues through the practices of debt bondage, indentured servitude, serfdom, domestic servants kept in captivity, certain adoptions in which children are forced to work as slaves, child soldiers, and forced marriage.
- Most are debt slaves, largely in South Asia, who are under debt bondage incurred by lenders, sometimes even for generations.
- Debt bondage or bonded labor occurs when a person pledges himself or herself against a loan.
- The services required to repay the debt and their duration may be undefined.
- Debt bondage can be passed on from generation to generation, with children required to pay off their parents' debt.
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- Consequently, the more common solution became to pay the passage of a young worker from the British Isles (including Ireland, Wales, and Scotland) or Germany, who would work for several years to pay off the debt of the travel costs.
- Unlike slaves, servants could look forward to a release from bondage.
- The crew often pilfered their baggage, and while many travelers started their journey with sufficient funds to pay their way, they were often overcharged so that they arrived with a debt to settle in addition to their servitude contract.
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- The debt ratio is expressed as Total debt / Total assets.
- Debt ratios measure the firm's ability to repay long-term debt.
- The debt/asset ratio shows the proportion of a company's assets which are financed through debt.
- If the ratio is greater than 0.5, most of the company's assets are financed through debt.
- A company with a high debt ratio (highly leveraged) could be in danger if creditors start to demand repayment of debt.
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- The Debt-to-Equity Ratio is a financial ratio that compares the debt of a company to its equity and is closely related to leveraging.
- The Debt-to-Equity Ratio is a financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets, and is calculated as total debt / total equity.
- Debt is typically a long-term liability that represents a company's obligation to pay both principal and interest to purchasers of that debt.
- Calculating a company's debt to equity ratio is straight forward, and the debt and equity components can be found on a company's respective balance sheet.
- For more advanced analysis, financial analysts can calculate a company's debt to equity ratio using market values if both the debt and equity are publicly traded.
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- The opposite of secured debt is unsecured debt, which is not linked to any specific piece of property.
- Senior debt has seniority over subordinated debt in the issuer's capital structure.
- Subordinated debt is repaid after other debts in the case of liquidation or bankruptcy.
- Such debt is referred to as subordinate, because the debt providers (the lenders) have subordinate status relative to the normal debt.
- Because subordinated debt is repaid only after other debts have been paid, they are riskier for lenders.
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- The debt-to-equity ratio (D/E) indicates the relative proportion of shareholder's equity and debt used to finance a company's assets.
- The formula of debt/equity ratio: D/E = Debt (liabilities) / equity.
- A similar ratio is the ratio of debt-to-capital (D/C), where capital is the sum of debt and equity:D/C = total liabilities / total capital = debt / (debt + equity)
- The debt-to-total assets (D/A) is defined asD/A = total liabilities / total assets = debt / (debt + equity + non-financial liabilities)
- Debt to equity can also be reformulated in terms of assets or debt: D/E = D /(A – D) = (A – E) / E
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- Government debt, also known as public debt, or national debt, is the debt owed by a central government.
- Government debt, also known as public debt, or national debt, is the debt owed by a central government.
- As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers.
- Government debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders).
- Sovereign debt usually refers to government debt that has been issued in a foreign currency.
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- In this case, it has a debt ratio of 200%.
- The debt ratio is a financial ratio that indicates the percentage of a company's assets that are provided via debt.
- When used to calculate a company's financial leverage, the debt usually includes only the Long Term Debt (LTD).
- D/E = Debt(liabilities)/Equity.
- The debt service coverage ratio (DSCR), also known as debt coverage ratio (DCR), is the ratio of cash available for debt servicing to interest, principal, and lease payments.
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- In general, creditors understand that bankruptcy is an option for debtors with excessive debt.
- A debt restructuring is usually less expensive than bankruptcy.
- Debt restructurings typically involve a reduction of debt and an extension of payment terms.
- A debtor and creditor could also agree to a debt-for-equity swap, wherein a company's creditors generally agree to cancel some or all of the debt in exchange for equity in the company.
- This simplifies the debtor's obligations and can result in faster debt repayment.
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- LBOs use debt to secure an acquisition and the acquired assets service the debt.
- As the debt usually has a lower cost of capital than the equity, the returns on the equity increase with the increasing debt.
- In turn, this then led to insolvency or to debt-to-equity swaps, in which the equity owners lose control over the business and the debt providers assume the equity.
- Senior debt: This debt is secured with the assets of the target company and has the lowest interest margin
- Junior debt: This debt usually has no securities and bears a higher interest margin