|Current Tax Payment Act of 1943|
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Definition of Current Tax Payment Act of 1943
Current Tax Payment Act of 1943
A federal act requiring employers to withhold income taxes from employee pay.
ADF (annuity discount factor)
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
fractional interest discount
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.
PPF (periodic perpetuity factor)
a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity.
Act of state doctrine
This doctrine says that a nation is sovereign within its own borders and its domestic
A market in which there is much trading.
Active portfolio strategy
A strategy that uses available information and forecasting techniques to seek a
The physical commodity underlying a futures contract. Cash commodity, physical.
After-tax profit margin
The ratio of net income to net sales.
After-tax real rate of return
Money after-tax rate of return minus the inflation rate.
The pool factor implied by the scheduled amortization assuming no prepayemts.
Present value of $1 paid for each of t periods.
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
A situation wherein participants in a transaction have different net tax rates.
Average tax rate
taxes as a fraction of income; total taxes divided by total taxable income.
Balance of payments
A statistical compilation formulated by a sovereign nation of all economic transactions
Before-tax profit margin
The ratio of net income before taxes to net sales.
Break-even lease payment
The lease payment at which a party to a prospective lease is indifferent between
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
Cash flow after interest and taxes
Net income plus depreciation.
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
A transaction where exchange is immediate, as contrasted to a forward contract, which
The market model applied to a single security. The slope of the line is a security's beta.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
The percentage of a given month's sales collected during the month of sale and each
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual
The month in which futures contracts may be satisfied by making or accepting a delivery.
Rules set by the Chicago Board of Trade for determining the invoice price of each
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
A bond's interest payments.
Net flow of goods, services, and unilateral transactions (gifts) between countries.
Value of cash, accounts receivable, inventories, marketable securities and other assets that
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Amount owed for salaries, interest, accounts payable and other debts due within 1 year.
In Treasury securities, the most recently auctioned issue. Trading is more active in current
current time to maturity on an outstanding debt instrument.
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
Indicator of short-term debt paying ability. Determined by dividing current assets by current
For bonds or notes, the coupon rate divided by the market price of the bond.
Related: Benchmark issues
Date of payment
Date dividend checks are mailed.
Existing in actual fact although not by official recognition.
A non-cash expense that provides a source of free cash flow. Amount allocated during the
Delivery versus payment
A transaction in which the buyer's payment for securities is due at the time of
Depreciation tax shield
The value of the tax write-off on depreciation of plant and equipment.
Present value of $1 received at a stated future date.
Agreement between two countries that taxes paid abroad can be offset against
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
A bond portfolio management strategy that involves finding the lowest cost portfolio
A financial institution that buys a firm's accounts receivables and collects the debt.
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
A way of decomposing the factors that influence a security's rate of return into common and
A well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of
Sale of a firm's accounts receivable to a financial institution known as a factor.
FHA prepayment experience
The percentage of loans in a pool of mortgages outstanding at the origination
A guaranteed investment contract where the credit rating is tied to some variable
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
A cash market transaction in which delivery of the commodity is deferred until after the
Forward forward contract
In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to
Agreement to buy or sell a set number of shares of a specific stock in a designated future
Futures contract multiple
A constant, set by an exchange, which when multiplied by the futures price gives
A 1933 act in which Congress forbade commercial banks to own, underwrite, or deal in
Publicly owned stock in a firm is replaced with complete equity ownership by a
Graduated-payment mortgages (GPMs)
A type of stepped-payment loan in which the borrower's payments
Guaranteed insurance contract
A contract promising a stated nominal interest rate over some specific time
Guaranteed investment contract (GIC)
A pure investment product in which a life company agrees, for a
A contract that obligates a purchaser of a project's output to make cash
Highly leveraged transaction (HLT)
Bank loan to a highly leveraged firm.
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
Transaction carried out between two units of the same corporation.
Interest equalization tax
tax on foreign investment by residents of the U.S. which was abolished in 1974.
Contractual debt payments based on the coupon rate of interest and the principal amount.
Interest tax shield
The reduction in income taxes that results from the tax-deductibility of interest payments.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Lag response of prepayments
There is typically a lag of about three months between the time the weighted
Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.
Manufactured housing securities (MHSs)
Loans on manufactured homes - that is, factory-built or
Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.
Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.
Factoring arrangement that provides collection and insurance of accounts receivable.
Most distant futures contract
When several futures contracts are considered, the contract settling last.
A version of the capital asset pricing model derived by Merton that includes extramarket
Nearby futures contract
When several futures contracts are considered, the contract with the closest
Net benefit to leverage factor
A linear approximation of a factor, T*, that enables one to operationalize the
Next futures contract
The contract settling immediately after the nearby futures contract.
Nexus (of contracts)
A set or collection of something.
Factoring arrangement that provides collection, insurance, and finance for accounts receivable.
A special case of the arbitrage pricing theory that is derived from the one-factor model by
Contracts which have been bought or sold without the transaction having been completed by
The contract that balances the three types of agency costs (contracting, monitoring, and
A contract that, in exchange for the option price, gives the option buyer the right, but not
Options contract multiple
A constant, set at $100, which when multiplied by the cash index value gives the
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
The supposition that investors overreact to unanticipated news, resulting in
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