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Debt is that which is owed, an obligation to repay principal. Debt is used in a corporate finance contact by a business to finance operations, growth or a transfer of ownership. Some companies and corporations use debt as a part of their overall corporate finance strategy. Debt is a secured obligation that requires the borrower to repay the principal amount and interest at specified periods. It has a term and usually there are covenants that must be complied with.

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