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When a company repurchases its unsecured notes, the debt has been: Group of answer choices determined. discounted. revalued. redeemed.

Question

When a company repurchases its unsecured notes, the debt has been:

  • determined.
  • discounted.
  • revalued.
  • redeemed.
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Solution

When a company repurchases its unsecured notes, it effectively eliminates that particular debt from its balance sheet. This action is commonly referred to as "redeeming" the debt. The term "redeemed" indicates that the company's obligation to pay back the borrowed funds is satisfied through the repurchase transaction.

Here’s a brief overview of the terms:

  1. Determined: This typically pertains to establishing the terms of the debt or the amount due, rather than the act of repurchase.
  2. Discounted: This refers to valuing the debt at a lower price than its face value, often prior to selling or redeeming it.
  3. Revalued: This would imply a change in the valuation of the debt based on certain factors and does not specifically refer to the act of repurchase.
  4. Redeemed: This is the correct term that describes the company repurchasing its unsecured notes, thereby fulfilling or canceling the debt.

Final Answer

Redeemed

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