![]() |
|
Financial Terms | |
Capital Gain |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: payroll, tax advisor, stock trading, credit, financial advisor, financial, inventory control, business, |
Definition of Capital GainCapital GainAn increase in the value of an asset. Capital gainThe gain recognized on the sale of a capital item (fixed asset), calculated capital gainThe positive difference between the adjusted cost base of an investment held as a capital property and the proceeds of disposition you receive when you sell it. When you sell such an investment for more than you paid, you realize a capital gain. Capital gainWhen a stock is sold for a profit, it's the difference between the net sales price of securities and
Related Terms:Capital gains yieldThe price change portion of a stock's return. Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized againstfuture-period revenue. Accretion (of a discount)In portfolio accounting, a straight-line accumulation of capital gains on discount Attribution RulesLegislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you. ![]() BasisRegarding a futures contract, the difference between the cash price and the futures price observed in the Cash dividendA dividend paid in cash to a company's shareholders. The amount is normally based on DistributionsPayments from fund or corporate cash flow. May include dividends from earnings, capital IRA/Keogh accountsSpecial accounts where you can save and invest, and the taxes are deferred until money Last To Die CoverageThis means that there are two or more life insured on the same policy but the death benefit is paid out on the last person to die. The cost of this type of coverage is much less than a first to die policy and it is generally used to protect estate value for children where there might be substantial capital gains taxes due upon the death of the last parent. This kind of policy is also valuable when one of two people covered has health problems which would prohibit obtaining individual coverage. Paper gain (loss)Unrealized capital gain (loss) on securities held in portfolio, based on a comparison of Riding the yield curveBuying long-term bonds in anticipation of capital gains as yields fall with the Tax deferral optionThe feature of the U.S. Internal Revenue Code that the capital gains tax on an asset is Tax differential view ( of dividend policy)The view that shareholders prefer capital gains over dividends, ![]() Tax-timing optionThe option to sell an asset and claim a loss for tax purposes or not to sell the asset and Total dollar returnThe dollar return on a nondollar investment, which includes the sum of any Total returnIn performance measurement, the actual rate of return realized over some evaluation period. In Traditional view (of dividend policy)An argument that "within reason," investors prefer large dividends to "Soft" Capital Rationingcapital rationing that under certain circumstances can be violated or even viewed Additional paid-in capitalAmounts in excess of the par value or stated value that have been paid by the public to acquire stock in the company; synonymous with capital in excess of par. Additional paid-in capitalAny payment received from investors for stock that exceeds additional paid-in capitalDifference between issue price and par value of stock. Also called capital surplus. Aggressive Capitalization Policiescapitalizing and reporting as assets significant portions of Aggressive Cost CapitalizationCost capitalization that stretches the flexibility within generally Annualized gainIf stock X appreciates 1.5% in one month, the annualized gain for that sock over a twelve ![]() authorized share capitalMaximum number of shares that the company is permitted to issue, as specified in the firm’s articles of incorporation. Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market CapitalMoney invested in a firm. CAPITALThe money, raised by selling stock or bonds or taking out loans, that you use to start, operate, and grow a business. CapitalThe shareholders’ investment in the business; the difference between the assets and liabilities capitalA very broad term rooted in economic theory and referring to CapitalThe investment by a company’s owners in a business, plus the impact of any Capitala) Physical capital: buildings, equipment, and any materials used to produce other goods and services in the future rather than being consumed today. CapitalExpenditures Purchases of productive long-lived assets, in particular, items of property, CapitalAny asset or stock of assets, financial or physical, capable of producing income. Capital accountNet result of public and private international investment and lending activities. Capital AccountThat part of the balance of payments accounts that records demands for and supplies of a currency arising from purchases or sales of assets. Capital allocationdecision Allocation of invested funds between risk-free assets versus the risky portfolio. capital assetan asset used to generate revenues or cost savings Capital assetA fixed asset, something that is expected to have long-term usage within Capital asset pricing model (CAPM)An economic theory that describes the relationship between risk and Capital Asset Pricing Model (CAPM)A model for estimating equilibrium rates of return and values of capital asset pricing model (CAPM)Theory of the relationship between risk and return which states that the expected risk Capital budgetA firm's set of planned capital expenditures. capital budgetmanagement’s plan for investments in longterm capital budgetList of planned investment projects. Capital budgetingThe process of choosing the firm's long-term capital assets. capital budgetingRefers generally to analysis procedures for ranking Capital BudgetingThe process of ranking and selecting investment alternatives and capital budgetinga process of evaluating an entity’s proposed Capital budgetingThe series of steps one follows when justifying the decision to purchase capital budgeting decisionDecision as to which real assets the firm should acquire. Capital Consumption AllowanceSee depreciation. Capital Cost Allowance (CCA)The annual depreciation expense allowed by the Canadian Income Tax Act. Capital employedThe total of debt and equity, i.e. the total funds in the business. Capital expendituresAmount used during a particular period to acquire or improve long-term assets such as capital expendituresRefers to investments by a business in long-term Capital flightThe transfer of capital abroad in response to fears of political risk. Capital FlowsPurchase by foreigners of our assets (capital inflows) or our purchase of foreign assets (capital outflows). CAPITAL IN EXCESS OF PAR VALUEWhat a company collected when it sold stock for more than the par value per share. Capital in excess parAmounts in excess of the par value or stated value that have been paid by the public to acquire stock in the company; synonymous with additional paid-in capital. capital investment analysisRefers to various techniques and procedures Capital InvestmentsMoney used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses. Capital leaseA lease obligation that has to be capitalized on the balance sheet. Capital leaseA lease in which the lessee obtains some ownership rights over the asset Capital LeaseOne where substantially all of the benefits and risks of ownership are transferred to the lessee. It must be reflected on the company's balance sheet as an asset and corresponding liability. Capital lossThe difference between the net cost of a security and the net sale price, if that security is sold at a loss. capital lossThe negative difference between the adjusted cost base of an investment held as a capital property and the proceeds of disposition you receive when you sell it. When you sell such an investment for less than you paid, you incur a capital loss. Capital marketThe market for trading long-term debt instruments (those that mature in more than one year). Capital marketThe market in which investors buy and sell shares of companies, normally associated with a Stock Exchange. Capital MarketA market that specializes in trading long-term, relatively high risk Capital MarketThe market in which savings are made available to those needing funds to undertake investment projects. A financial market in which longer-term (maturity greater than one year) bonds and stocks are traded. Capital market efficiencyReflects the relative amount of wealth wasted in making transactions. An efficient Capital market imperfections viewThe view that issuing debt is generally valuable but that the firm's Capital market line (CML)The line defined by every combination of the risk-free asset and the market portfolio. capital marketsMarkets for long-term financing. Capital MobilityA situation in which assets can easily be purchased by foreigners. Capital rationingPlacing one or more limits on the amount of new investment undertaken by a firm, either capital rationinga condition that exists when there is an capital rationingLimit set on the amount of funds available for investment. capital recoveryRefers to recouping, or regaining, invested capital over capital stockOwnership shares issued by a business corporation. A business Capital StockThe total amount of plant, equipment, and other physical capital. Capital structureThe makeup of the liabilities and stockholders' equity side of the balance sheet, especially Capital StructureThe combination of debt, preferred stock, and common stock used capital structureFirm’s mix of long-term financing. Capital StructureThe mix of the various types of debt and equity capital maintained by a firm. The more debt capital a firm has in its capital structure, the more highly leveraged the firm is considered to be. capital structure, or capitalizationTerms that refer to the combination of Capital surplusAmounts of directly contributed equity capital in excess of the par value. CapitalismAn economic system in which the marketplace, through the pricing mechanism, determines the allocation and distribution of scarce goods and services, with a minimum of government involvement. CapitalizationThe debt and/or equity mix that fund a firm's assets. CapitalizationThe total amount of debt and equity issued by a company. Capitalization methodA method of constructing a replicating portfolio in which the manager purchases a capitalization of costsWhen a cost is recorded originally as an increase Capitalization RateA discount rate used to find the present value of a series of future cash receipts. Sometimes called discount rate. Capitalization ratiosAlso called financial leverage ratios, these ratios compare debt to total capitalization Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |