|Equity contribution agreement
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Definition of Equity contribution agreement
Equity contribution agreement
An agreement to contribute equity to a project under certain specified
The discount rate that reflects only the business risks of a project and abstracts from the
The ratio of total assets to stockholder equity.
A contract for privately placed debt.
A management style that de-emphasizes the significance of economic
An agreement signed by the original United Nations members in 1944 that
An agreement to invest cash in a project to the extent required to cover any cash
Value of outstanding common shares at par, plus accumulated retained
An understanding between a company and the host government that specifies the
The difference between variable revenue and variable cost.
Indicator of financial leverage. Compares assets provided by creditors to assets provided
A common term for convertible bonds because of their equity component and the
A pension plan in which the sponsor is responsible only for making specified
agreement between two countries that taxes paid abroad can be offset against
An international equity placement where the offering is split into two
Represents ownership interest in a firm. Also the residual dollar value of a futures trading account,
An agreement in which one party, for an upfront premium, agrees to compensate the other at
Also called a residual claim, a claim to a share of earnings after debt obligation have been
The simultaneous purchase of an equity floor and sale of an equity cap.
An agreement in which one party agrees to pay the other at specific time periods if a specific
Used to refer to warrants because they are usually issued attached to privately placed bonds.
Total assets divided by total common stockholders' equity; the amount of total assets per
Securities that give the holder the right to buy or sell a specified number of shares of stock, at
A swap in which the cash flows that are exchanged are based on the total return on some stock
Related: Variable life
Those holding shares of the firm's equity.
Securities sold in the Euromarket. That is, securities initially sold to investors
Fiscal agency agreement
An alternative to a bond trust deed. Unlike the trustee, the fiscal agent acts as an
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Forward rate agreement (FRA)
agreement to borrow or lend at a specified future date at an interest rate
GEMs (growing-equity mortgages)
Mortgages in which annual increases in monthly payments are used to
Interest rate agreement
An agreement whereby one party, for an upfront premium, agrees to compensate the
The balance of a margin account. Related: buying on margin, initial margin requirement.
Stock in a firm that relies on financial leverage. Holders of leveraged equity face the
Long-term debt to equity ratio
A capitalization ratio comparing long-term debt to shareholders' equity.
A contract for privately placed debt.
Preferred equity redemption stock (PERC)
Preferred stock that converts automatically into equity at a
Preferred stock agreement
A contract for preferred stock.
As used in connection with project financing, an agreement to purchase a specific
Raw material supply agreement
As used in connection with project financing, an agreement to furnish a
An agreement with a commitment by the seller (dealer) to buy a security back from
Return on equity (ROE)
Indicator of profitability. Determined by dividing net income for the past 12
Revolving credit agreement
A legal commitment wherein a bank promises to lend a customer up to a
This is a company's total assets minus total liabilities. A company's net worth is the
A revision to the Bretton Woods international monetary system which was signed at
In a rights issue, agreement that the underwriter will purchase any stock not purchased by investors.
Contracts where the bidding firm in a takeover attempt agrees to limit its holdings
Balance sheet item that includes the book value of ownership in the corporation. It
The residual claims that stockholders have against a firm's assets, calculated by
Stratified equity indexing
A method of constructing a replicating portfolio in which the stocks in the index
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
An agreement to put a specified amount of product per period through a particular
An agreement to put a specified amount of raw material per period through a particular
Top-down equity management style
A management style that begins with an assessment of the overall
Total debt to equity ratio
A capitalization ratio comparing current liabilities plus long-term debt to
RATE OF RETURN ON STOCKHOLDERSâ€™ EQUITY
The percentage return or profit that management made on each dollar stockholders invested in a company. Hereâ€™s how you figure it:
RATIO OF DEBT TO STOCKHOLDERSâ€™ EQUITY
A ratio that shows which groupâ€”creditors or stockholdersâ€”has the biggest stake in or the most control of a company:
STOCKHOLDERSâ€™ (OR OWNERSâ€™) EQUITY
The value of the ownersâ€™ interests in a company.
Also the difference between the selling price and variable costs, which can be expressed either per
Funds raised from shareholders.
Sales revenue less the cost of materials.
An account that reduces an equity account. An example is Treasury stock.
Amounts contributed to the company by the owners (contributed capital) plus the residual earnings of the business (retained earnings).
The total amount of contributed capital and retained earnings; synonymous with stockholders' equity.
The total amount of contributed capital and retained earnings; synonymous with shareholdersâ€™ equity.
An intermediate measure of profit equal to sales revenue
A widely used financial statement ratio to assess the
Refers to one of the two basic sources of capital for a business, the
Refers to the capital invested in a business by its shareowners
return on equity (ROE)
This key ratio, expressed as a percent, equals net
stockholders' equity, statement of changes in
Although often considered
Cost of Equity
Same as the cost of common stock. Sometimes viewed as the
Return on Common Equity Ratio
A measure of the percentage return earned on the value of the
the difference between selling price and
contribution margin ratio
the proportion of each revenue dollar remaining after variable costs have been covered;
on Tariffs and Trade (GATT) a treaty
North American Free Trade Agreement (NAFTA)
an agreement among Canada, Mexico, and the United States establishing the North American Free Trade Zone, with a resulting reduction in trade barriers
product contribution margin
the difference between selling price and variable cost of goods sold
total contribution margin
see contribution margin
The margin that results when variable production costs are subtracted
The difference between the total of all recorded assets and liabilities on the balance
The total of all capital contributions and retained earnings on a businessâ€™s
Ownership. Common stock represents equity in a corporation.
The percentage tax charged by a state to an employer to
Defined Contribution Plan
A qualified retirement plan under which the employer
Federal Insurance Contributions Act of 1935 (FICA)
A federal Act authorizing the government to collect Social Security and Medicare payroll taxes.
Self-Employment Contributions Act (SECA)
A federal Act requiring self-employed business owners to pay the same total tax rates for Social Security and
An agreement between countries whereby an employee only has to pay Social Security taxes to the country in which he or she is working
Accounting method for an equity security in cases where the investor has sufficient
An ownership interest in an enterprise, including preferred and common stock.
The residual interest or owners' claims on the assets of a corporation
This is an agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold. The agreement sets the value of each shareholders interest and stipulates what happens when one of the owners wishes to dispose of his/her interest during his/her lifetime as well as disposal of interest upon death or disability. Life insurance, critical illness coverage and disability insurance are major considerations to help fund this type of agreement.
Conditional Sale Agreement
An agreement entered into between a conditional buyer and a conditional seller setting out the terms under which goods change hands.
A legal document whereby the one party, usually the prospective investor, pledges to keep strictly confidential, and return on request, any and all information provided by the entrepreneur seeking funding.
A comparison of debt to equity in a company's capital structure.
The net worth of a business, consisting of capital stock, capital (or paid-in) surplus (or retained earnings), and, occasionally, certain net worth reserves. Common equity is that part of the total net worth belonging to the common shareholders. Total equity includes preferred shareholders. The terms common stock, net worth, and common equity are frequently used interchangeably.
Refers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount.
This legal document records the final understanding of the parties with respect to the proposed transaction.
Funds, other than paid-up capital and retained earnings, employed in a business and which will remain in a business as permanent capital.
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