What is Commercial Paper?
Commercial paper is an unsecured, short-term debt instrument issued by businesses at a discount from its face value. It's a great way to quickly raise capital without having to incur the expenses associated with taking out a loan.Formula
(Discount Rate - Face Value) / Face ValueHow do I calculate the commercial paper?
It is important to understand how to calculate the Commercial Paper rate. The rate is calculated by deducting the face value of the paper from its discount rate. The resulting value is then divided by the face value of the paper to get the Commercial Paper rate. To calculate the Commercial Paper rate, use the following formula: (Discount Rate - Face Value) / Face Value . It is important to note that Commercial Paper is unsecured and short-term debt issued by corporations, so caution should be taken when investing in this type of paper. For further calculations, Sourcetable can be used for more accuracy.
What is Commercial Paper?
Commercial paper is short-term debt issued by corporations.
What is the value of Commercial Paper?
Commercial paper is usually issued at a discount from its face value.
Key Points
How do I calculate commercial paper?
(Discount Rate - Face Value) / Face Value
Short-Term Debt
Commercial paper is debt issued by corporations for a short-term period. This type of debt is usually issued at a discount from its face value.
Face Value Discount
The face value of commercial paper is the amount that the issuer promises to pay at maturity. However, when the paper is issued, it is usually discounted and sold at a lower amount than the face value.
