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Definition of Equity swap
A swap in which the cash flows that are exchanged are based on the total return on some stock
A set of transactions (also called a debt-equity swap) in which a firm buys a country's dollar bank
The discount rate that reflects only the business risks of a project and abstracts from the
swap in which the principal or national amount rises (falls) as interest rates
The ratio of total assets to stockholder equity.
Creditors exchange the debt of one defaulting borrower for the debt of another
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
A management style that de-emphasizes the significance of economic
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
A fixed rate currency swap against floating U.S. dollar LIBOR payments.
Value of outstanding common shares at par, plus accumulated retained
An agreement to swap a series of specified payment obligations denominated in one currency
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
swap between two LIBO rates of interest, e.g. yen LIBOR for dollar LIBOR. Payments are
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.
Equity contribution agreement
An agreement to contribute equity to a project under certain specified
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
Related: Variable life
Those holding shares of the firm's equity.
Securities sold in the Euromarket. That is, securities initially sold to investors
Extending maturity through a swap, e.g. selling a 2-year note and buying one with a slightly
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Foreign exchange swap
An agreement to exchange stipulated amounts of one currency for another currency
GEMs (growing-equity mortgages)
Mortgages in which annual increases in monthly payments are used to
Interest rate swap
A binding agreement between counterparties to exchange periodic interest payments on
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
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
An interest rate swap used to alter the cash flow characteristics of an institution's liabilities so
Long-term debt to equity ratio
A capitalization ratio comparing long-term debt to shareholders' equity.
Preferred equity redemption stock (PERC)
Preferred stock that converts automatically into equity at a
Pure yield pickup swap
Moving to higher yield bonds.
A financial tool in which the buyer has the right, or option, to enter into a swap as a floatingrate
See: differential swap.
Rate anticipation swaps
An exchange of bonds in a portfolio for new bonds that will achieve the target
Return on equity (ROE)
Indicator of profitability. Determined by dividing net income for the past 12
This is a company's total assets minus total liabilities. A company's net worth is the
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
A swap in which a money manager exchanges one bond for another bond that is similar in
An arrangement whereby two companies lend to each other on different terms, e.g. in different
Related: swap sale.
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.
The difference between spot and forward rates expressed in points, e.g., $0.0001 per pound sterling.
An interest rate swap designed to end a counterparty's role in another interest rate swap,
Also called a swap assignment, a transaction that ends one counterparty's role in an interest rate
Options on interest rate swaps. The buyer of a swaption has the right to enter into an interest rate
swapping two similar bonds to receive a tax benefit.
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.
Funds raised from shareholders.
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.
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
An exchange of cash flows between two counterparties. The
A contract between two parties to exchange cash flows in the future
A swap option; an option on an interest-rate swap. The option gives
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
Arrangement by two counterparties to exchange one stream of cash flows for another.
Ownership. Common stock represents equity in a corporation.
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
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.
Funds, other than paid-up capital and retained earnings, employed in a business and which will remain in a business as permanent capital.
Represents the total assets of a corporation less liabilities.
The net worth of a company. This represents the ownership interest of the shareholders (common and preferred) of a company. For this reason, shares or stocks are often known as equities.
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
Through equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock.
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