legal document that specifically states the conditions under which a bond has been issued, the rights of the bondholders, and the duties of the issuing corporation; also called bond indenture; deed of trust. An indenture normally contains a number of standard and restrictive provisions (covenant), including a sinking fund requirement, a minimum debt-equity ratio to be maintained, and an identification of the collateral if the bond is secured. It also covers redemption rights and call provisions. The indenture provides for the appointment of a trustee to act on behalf of bondholders.

agreement between a bond issuer and holder covering the terms of issue; also called deed of trust. The bond terms include such conditions as dollar amount of issue;pledged asset; covenant(e.g., working capital requirement); events of default; and call privileges. It also provides for the appointment of a trustee.

weighted cost of the additional capital raised in a given period. Weighted cost of capital, also called composite cost of capital, is the weighted average of costs applicable to the issues of debt and classes of equity that compose the firm's capital structure. Also called marginal cost of capital.