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grace period business definition
- The period of time a payment can be late without resulting in a penalty or cancellation. For example, an insurance policy may stipulate a one-month grace period before the policy is canceled.
- The period during which the issuer of a bond is not required to make interest payments. For example, a bond issued this year might start paying interest only five years from now. Bonds with grace periods are sometimes issued during a corporate restructuring.
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