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Definition of co-borrower
A co-borrower is the secondary borrower on a borrowing account. The primary borrower will receive mailed monthly statements while the co-borrower has the option to choose whether or not he/she will also receive statements.
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
the additional value inherent in the control interest as contrasted to a minority interest, which reflects its power of control
an amount or percentage deducted from a pro rata share of the value of 100% of an equity interest in a business, to reflect the absence of some or all of the powers of control.
an amount or percentage deducted from an equity interest to reflect lack of marketability.
Abrams’ model for calculating DLOM based on the interaction of discounts from four economic components.
the rate of return on investment that would be required by a prudent investor to invest in an asset with a specific level risk. Also, a rate of return used to convert a monetary sum, payable or receivable in the future, into present value.
the combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor.
model for calculating DLOM for minority interests r the discount rate
Schedule of depreciation rates allowed for tax purposes.
The change in the value of a firm's foreign currency denominated accounts due to a
Earnings of a firm as reported on its income statement.
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
The ease and quickness with which assets can be converted to cash.
Money owed to suppliers.
Money owed by customers.
Accounts receivable turnover
The ratio of net credit sales to average accounts receivable, a measure of how
Accretion (of a discount)
In portfolio accounting, a straight-line accumulation of capital gains on discount
A promise to sell an asset before the seller has lined up purchase of the asset. This
A bond covenant that specifies certain actions the firm must take.
Agency cost view
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
Total costs, explicit and implicit.
Articles of incorporation
Legal document establishing a corporation and its structure and purpose.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
The correlation of a variable with itself over successive time intervals.
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average age of accounts receivable
The weighted-average age of all of the firm's outstanding invoices.
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
Bank collection float
The time that elapses between when a check is deposited into a bank account and when the funds are available to the depositor, during which period the bank is collecting payment from the payer's bank.
Bank discount basis
A convention used for quoting bids and offers for treasury bills in terms of annualized
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
Large and creditworthy company.
A contractual provision in a bond indenture. A positive covenant requires certain actions, and
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
Related: Fixed-income equivalent.
Net result of public and private international investment and lending activities.
costs that increase with increases in the level of investment in current assets.
The actual physical commodity, as distinguished from a futures contract.
Cash conversion cycle
The length of time between a firm's purchase of inventory and the receipt of cash
A company that pays out all earnings per share to stockholders as dividends. Or, a company or
An incentive offered to purchasers of a firm's product for payment within a specified time
Cash flow coverage ratio
The number of times that financial obligations (for interest, principal payments,
Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
Coefficient of determination
A measure of the goodness of fit of the relationship between the dependent and
Refers to the fact that the merger of two firms decreases the probability of default on
An upper and lower limit on the interest rate on a floating-rate note.
Assets than can be repossessed if a borrower defaults.
Collateral trust bonds
A bond in which the issuer (often a holding company) grants investors a lien on
Collateralized mortgage obligation (CMO)
A security backed by a pool of pass-throughs , structured so that
The negative float that is created between the time when you deposit a check in your account
The percentage of a given month's sales collected during the month of sale and each
Procedures followed by a firm in attempting to collect accounts receivables.
The combination of all of the individual opinions about a stock's or security's value.
A bank that ranks just below a lead manager in a syndicated Eurocredit or international bond
Also called horizon matching, a variation of multiperiod immunization and cash
A strategy in which a put and with the same strike price and expiration are either both
Demand for payment.
Short-term unsecured promissory notes issued by a corporation. The maturity of
The risk that a foreign debtor will be unable to pay its debts because of business events,
The fee paid to a broker to execute a trade, based on number of shares, bonds, options, and/or
A broker on the floor of an exchange acts as agent for a particular brokerage house and
A firm which buys and sells future contracts for customer accounts. Related: futures
A trader is said to have a commitment when he assumes the obligation to accept or make
A fee paid to a commercial bank in return for its legal commitment to lend funds that have
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for Investment Management and Research (AIMR)'s Performance Presentation Standards Implementation
Commodities Exchange Center (CEC)
The location of five New York futures exchanges: commodity
A commodity is food, metal, or another physical substance that investors buy or sell, usually via
An agreement between two or more countries that permits the free movement of capital
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
The representing of accounting information over multiple years as percentages
Related: Unsystematic risk
Comparative credit analysis
A method of analysis in which a firm is compared to others that have a desired
The collection of money managers of similar investment style used for assessing
An excess balance that is left in a bank to provide indirect compensation for loans
Sufficient ability or fitness for ones needs. Possessing the necessary abilities to be qualified to
Intra- or intermarket rivalry between businesses trying to obtain a larger piece of the same
A securities offering process in which securities firms submit competing bids to the
An offering of securities through competitive bidding.
Complete capital market
A market in which there is a distinct marketable security for each and every
The entire portfolio, including risky and risk-free assets.
Insurance that a construction contract will be successfully completed.
The risk that a project will not be brought into operation successfully.
An undertaking either (1) to complete a project such that it meets certain specified
Voluntary arrangement to restructure a firm's debt, under which payment is reduced.
Interest paid on previously earned interest as well as on the principal.
Option on an option.
The process of accumulating the time value of money forward in time. For example, interest
The number of compounding periods in a year. For example, quarterly
The length of the time period (for example, a quarter in the case of quarterly
Comprehensive due diligence investigation
The investigation of a firm's business in conjunction with a
A single centralized account into which funds collected at regional locations
Movement of cash from different lockbox locations into a single concentration
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