IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v22y1976i11p1175-1185.html
   My bibliography  Save this article

Optimal TIC Bids on Serial Bond Issues

Author

Listed:
  • G. O. Bierwag

    (University of Oregon)

Abstract

Most serial bond issues are sold competitively on an NIC (net interest cost) basis. The municipality awards the issue to the bidder submitting the lowest NIC. Although it is often acknowledged that NIC is a defective measure of the interest cost and sometimes a costly one to the issuer, an alternative measure, the TIC (true interest cost, effective interest cost, interest cost according to the Canadian method, or the internal rate of return) is often regarded as too computationally difficult to employ. State and local governments are becoming increasingly aware of the internal rate of return or TIC as a measure of interest expense. The use of TIC as a method of awarding bond issues to underwriters is growing very rapidly. This paper contains a simple computer algorithm for calculating optimal bids on a TIC basis.

Suggested Citation

  • G. O. Bierwag, 1976. "Optimal TIC Bids on Serial Bond Issues," Management Science, INFORMS, vol. 22(11), pages 1175-1185, July.
    • Handle: RePEc:inm:ormnsc:v:22:y:1976:i:11:p:1175-1185
    DOI: 10.1287/mnsc.22.11.1175
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.22.11.1175
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.22.11.1175?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John Board & Charles Sutcliffe & William T. Ziemba, 2003. "Applying Operations Research Techniques to Financial Markets," Interfaces, INFORMS, vol. 33(2), pages 12-24, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:22:y:1976:i:11:p:1175-1185. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.