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Financial Terms | |
Convertibles |
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Definition of ConvertiblesConvertiblesSecurities (generally bonds or preferred shares) that are exchangeable at the option of the holder for common shares of the issuing firm.
Related Terms:Abandonment optionThe option of terminating an investment earlier than originally planned. Adjustable rate preferred stock (ARPS)Publicly traded issues that may be collateralized by mortgages and MBSs. Affirmative covenantA bond covenant that specifies certain actions the firm must take. American optionAn option that may be exercised at any time up to and including the expiration date. American optionAn option that can be exercised any time until its American sharesSecurities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign American-style optionAn option contract that can be exercised at any time between the date of purchase and ![]() Arbitrage-free option-pricing modelsYield curve option-pricing models. Asian optionoption based on the average price of the asset during the life of the option. Asset-Backed SecuritiesBond or note secured by assets of company. Auction rate preferred stock (ARPS)Floating rate preferred stock, the dividend on which is adjusted every Authorized sharesNumber of shares authorized for issuance by a firm's corporate charter. Authorized sharesThe number of shares of stock that the company is legally authorized to sell. Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market Barrier optionsContracts with trigger points that, when crossed, automatically generate buying or selling of Basket optionsPackages that involve the exchange of more than two currencies against a base currency at ![]() Binomial option pricing modelAn option pricing model in which the underlying asset can take on only two Black-Scholes option-pricing modelA model for pricing call options based on arbitrage arguments that uses Bonds payableAmounts owed by the company that have been formalized by a legal document called a bond. Book-entry securitiesThe Treasury and federal agencies are moving to a book-entry system in which Securities are not represented by engraved pieces of paper but are maintained in computerized records at the BOOK VALUE OF COMMON STOCKThe theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals: Brady bondsbonds issued by emerging countries under a debt reduction plan. cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits Call an optionTo exercise a call option. Call optionAn option contract that gives its holder the right (but not the obligation) to purchase a specified Call OptionA contract that gives the holder the right to buy an asset for a call optionRight to buy an asset at a specified exercise price on or before the exercise date. ![]() Canada Savings BondsA bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value. Cash flow per common shareCash flow from operations minus preferred stock dividends, divided by the Collateral trust bondsA bond in which the issuer (often a holding company) grants investors a lien on Common-base-year analysisThe representing of accounting information over multiple years as percentages common body of knowledge (CBK)the minimum set of knowledge needed by a person to function effectively in a particular field Common marketAn agreement between two or more countries that permits the free movement of capital Common SharesAre equity instruments that take no security against assets, have no fixed terms of repayment and pay no fixed dividends. common-size balance sheetBalance sheet that presents items as a percentage of total assets. common-size income statementIncome statement that presents items as a percentage of revenues. Common stockThese are Securities that represent equity ownership in a company. common shares let an Common stockshares of ownership sold to the public. Common StockA financial security that represents an ownership claim on the common stockOwnership shares in a publicly held corporation. Common StockThat part of the capital stock of a corporation that carries voting rights and represents Common stock equivalentA convertible security that is traded like an equity issue because the optioned Common stock marketThe market for trading equities, not including preferred stock. Common stock/other equityValue of outstanding common shares at par, plus accumulated retained Common stock ratiosRatios that are designed to measure the relative claims of stockholders to earnings Compound optionoption on an option. Confirmationhe written statement that follows any "trade" in the Securities markets. Confirmation is issued Conflict between bondholders and stockholdersThese two groups may have interests in a corporation that Convertible bondsbonds that can be converted into common stock at the option of the holder. Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the Convertible preferred stockpreferred stock that can be converted into common stock at the option of the holder. Corporate bondsDebt obligations issued by corporations. Cost of Common StockThe rate of return required by the investors in the common stock of Cost of Preferred StockThe rate of return required by the investors in the preferred stock of Covered or hedge option strategiesStrategies that involve a position in an option as well as a position in the Cumulative preferred stockpreferred stock whose dividends accrue, should the issuer not make timely Currency optionAn option to buy or sell a foreign currency. Cushion bondsHigh-coupon bonds that sell at only at a moderate premium because they are callable at a Dealer optionsOver-the-counter options, such as those offered by government and mortgage-backed Debt securitiesIOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and Delivery optionsThe options available to the seller of an interest rate futures contract, including the quality Discount securitiesNon-interest-bearing money market instruments that are issued at a discount and Dollar bondsMunicipal revenue bonds for which quotes are given in dollar prices. Not to be confused with Doubling optionA sinking fund provision that may allow repurchase of twice the required number of bonds Down-and-in optionBarrier option that comes into existence if asset price hits a barrier. Down-and-out optionBarrier option that expires if asset price hits a barrier. Earnings per share of common stockHow much profit a company made on each share of common stock this year. Elasticity of an optionPercentage change in the value of an option given a 1% change in the value of the Embedded optionAn option that is part of the structure of a bond that provides either the bondholder or Equity optionsSecurities that give the holder the right to buy or sell a specified number of shares of stock, at EquityholdersThose holding shares of the firm's equity. Escalating Price OptionA nonqualified stock option that uses a sliding scale for Eurodollar bondsEurobonds denominated in U.S.dollars. European optionoption that may be exercised only at the expiration date. Related: american option. European optionAn option that can be exercised only on its expiration date. European-style optionAn option contract that can only be exercised on the expiration date. Euroyen bondsEurobonds denominated in Japanese yen. Exchangeable SecuritySecurity that grants the security holder the right to exchange the security for the Exempt securitiesInstruments exempt from the registration requirements of the Securities Act of 1933 or the Exercising the optionThe act buying or selling the underlying asset via the option contract. Exit OptionsA variety of options available to an investor to recover their invested capital and the return on their investment. Federal agency securitiesSecurities issued by corporations and agencies created by the U.S. government, FirmRefers to an order to buy or sell that can be executed without confirmation for some fixed period. Also, Firm commitment underwritingAn undewriting in which an investment banking firm commits to buy the Firm's net value of debtTotal firm value minus total firm debt. Firm-specific riskSee:diversifiable risk or unsystematic risk. Floating-rate preferredpreferred stock paying dividends that vary with short-term interest rates. Foreign currency optionAn option that conveys the right to buy or sell a specified amount of foreign Fully diluted earnings per sharesEarnings per share expressed as if all outstanding convertible Securities Futures optionAn option on a futures contract. Related: options on physicals. Garmen-Kohlhagen option pricing modelA widely used model for pricing foreign currency options. General obligation bondsMunicipal Securities secured by the issuer's pledge of its full faith, credit, and Generally Accepted Accounting Principals (GAAP)A technical accounting term that encompasses the Generally accepted accounting principlesThe rules that accountants follow when processing accounting transactions and creating financial reports. The rules are primarily generally accepted accounting principles (GAAP)This important term generally accepted accounting principles (GAAP)Procedures for preparing financial statements. Generally Accepted Accounting Principles (GAAP)A common set of standards and procedures Generally Accepted Accounting Principles (GAAP)GAAP is the term used to describe the underlying rules basis on which financial statements are normally prepared. This is codified in the Handbook of The Canadian Institute of Chartered Accountants. Global bondsbonds that are designed so as to qualify for immediate trading in any domestic capital market Government securitiesNegotiable U.S. Treasury Securities. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |