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.
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
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.
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