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Definition of Bidder
A firm or person that wants to buy a firm or security.
the period before a formal announcement of a takeover bid in which one or more bidders are either preparing to make an announcement or speculating that someone else will.
The firm buys back its own stock from a potential bidder, usually at a substantial
A statement displayed on market tickers indicating that a bidder will pay cash for same day
curse Problem faced by uninformed bidders. For example, in an initial public offering uninformed
Measure taken by a target firm to avoid acquisition;
An agreement with a commitment by the seller (dealer) to buy a security back from
Device to pay cash to firm's shareholders that provides more preferable tax treatment
Program by which a corporation buys back its own shares in the open market. It is usually
A firm's repurchase of outstanding shares of its common stock.
Firm buys back stock from its shareholders.
the additional value inherent in the control interest as contrasted to a minority interest, which reflects its power of control
Abramsâ€™ model for calculating DLOM based on the interaction of discounts from four economic components.
a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity.
A merger or consolidation in which an acquirer purchases the acquiree's stock.
Publicly traded issues that may be collateralized by mortgages and MBSs.
A bond covenant that specifies certain actions the firm must take.
All or none
Requirement that none of an order be executed unless all of it can be executed at the specified price.
An arrangement whereby a security issue is canceled if the underwriter is unable
American Stock Exchange (AMEX)
The second-largest stock exchange in the United States. It trades
Date on which particular news concerning a given company is announced to the public.
Annualized holding period return
The annual rate of return that when compounded t times, would have
A security that is collateralized by loans, leases, receivables, or installment contracts
An option is at-the-money if the strike price of the option is equal to the market price of the
Auction rate preferred stock (ARPS)
Floating rate preferred stock, the dividend on which is adjusted every
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
The fee paid on the extension date if the buyer wishes to continue the option.
Brokerage house clerical operations that support, but do not include, the trading of stocks and
An intercompany loan channeled through a bank.
A loan in which two companies in separate countries borrow each other's currency for a
1) When bond yields and prices fall, the market is said to back-up.
A market condition in which futures prices are lower in the distant delivery months than in
Before-tax profit margin
The ratio of net income before taxes to net sales.
Beta equation (Stocks)
The beta of a stock is determined as follows:
This is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically
spread The difference between the bid and asked prices.
Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the
To purchase an asset; taking a long position.
To cover, offset or close out a short position. Related: evening up, liquidation.
Buy limit order
A conditional trading order that indicates a security may be purchased only at the designated
Buy on close
To buy at the end of the trading session at a price within the closing range.
Buy on margin
A transaction in which an investor borrows to buy additional shares, using the shares
Buy on opening
To buy at the beginning of a trading session at a price within the opening range.
A passive investment strategy with no active buying and selling of stocks from the
Mortgages in which monthly payments consist of principal and interest, with portions of these
Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is
Another term for a repo.
A financial analyst employed by a non-brokerage firm, typically one of the larger money
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
These are securities that represent equity ownership in a company. Common shares let an
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
Common stock market
The market for trading equities, not including preferred stock.
Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings
A securities offering process in which securities firms submit competing bids to the
The length of the time period (for example, a quarter in the case of quarterly
he written statement that follows any "trade" in the securities markets. Confirmation is issued
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
The percentage by which the conversion price in a convertible security exceeds the
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Convertible preferred stock
Preferred stock that can be converted into common stock at the option of the holder.
A security that can be converted into common stock at the option of the security holder,
The ability of the bankruptcy court to confirm a plan of reorganization over the objections of
The length of time for which the customer is granted credit.
A particularly profitable or otherwise particularly valuable corporate unit or asset of a firm.
Cumulative preferred stock
Preferred stock whose dividends accrue, should the issuer not make timely
A differential in promised yield that compensates the investor for the risk inherent in
A financial security, such as an option, or future, whose value is derived in part from the
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
The period during which a customer can deduct the discount from the net amount of the bill
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
With respect to a project financing, an arrangement under which the sponsors of a project
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Dow Jones industrial average
This is the best known U.S.index of stocks. It contains 30 stocks that trade on
Barrier option that comes into existence if asset price hits a barrier.
Barrier option that expires if asset price hits a barrier.
A classic negative change in ratings for a stock, and or other rated security.
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
An agreement permitting a bank customer to borrow either domestic dollars from the
In the interbank Eurodollar deposit market, an either-way market is one in which the bid
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
The time interval over which a money manager's performance is evaluated.
Exchange of stock
Acquisition of another company by purchase of its stock in exchange for cash or shares.
security that grants the security holder the right to exchange the security for the
Refers to an order to buy or sell that can be executed without confirmation for some fixed period. Also,
Firm commitment underwriting
An undewriting in which an investment banking firm commits to buy the
Firm's net value of debt
Total firm value minus total firm debt.
See:diversifiable risk or unsystematic risk.
A nonnegotiable debt security that can be redeemed at some fixed price or according to
A currency trades at a forward premium when its forward price is higher than its spot price.
Excess of the purchase price over the fair market value of the net assets acquired under purchase
Common stock of a company that has an opportunity to invest money and earn more than the
Length of time that an individual holds a security.
Holding period return
The rate of return over a given period.
The security to which a warrant is attached.
Money that moves across country borders in response to interest rate differences and that moves
A convertible security whose optioned common stock is trading in a middle range, causing
Common stock with a high dividend yield and few profitable investment opportunities.
International Monetary Fund
An organization founded in 1944 to oversee exchange arrangements of
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
A put option that has a strike price higher than the underlying futures price, or a call option
Intrinsic value of a firm
The present value of a firm's expected future net cash flows discounted by the
Law of one price
An economic rule stating that a given security must have the same price regardless of the
Privately placed common stock, so-called because the SEC requires a letter from the purchaser
Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use
Limitation on sale-and-leaseback
A bond covenant that restricts in some way a firm's ability to enter into
Forward rate minus expected future short-term interest rate.
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