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Definition of Equityholders
Those holding shares of the firm's equity.
A bond covenant that specifies certain actions the firm must take.
The discount rate that reflects only the business risks of a project and abstracts from the
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign
The annual rate of return that when compounded t times, would have
The ratio of total assets to stockholder equity.
Number of shares authorized for issuance by a firm's corporate charter.
A management style that de-emphasizes the significance of economic
Value of outstanding common shares at par, plus accumulated retained
he written statement that follows any "trade" in the securities markets. Confirmation is issued
One corporation holds shares in another firm.
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
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
A swap in which the cash flows that are exchanged are based on the total return on some stock
Related: Variable life
Securities sold in the Euromarket. That is, securities initially sold to investors
Refers to an order to buy or sell that can be executed without confirmation for some fixed period. Also,
Firm commitment underwriting
An undewriting in which an investment banking firm commits to buy the
Firm's net value of debt
Total firm value minus total firm debt.
See:diversifiable risk or unsystematic risk.
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Fully diluted earnings per shares
Earnings per share expressed as if all outstanding convertible securities
GEMs (growing-equity mortgages)
Mortgages in which annual increases in monthly payments are used to
A corporation that owns enough voting stock in another firm to control management and
Length of time that an individual holds a security.
Holding period return
The rate of return over a given period.
Intrinsic value of a firm
The present value of a firm's expected future net cash flows discounted by 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.
Management/closely held shares
Percentage of shares held by persons closely related to a company, as
Neglected firm effect
The tendency of firms that are neglected by security analysts to outperform firms that
shares that are currently owned by investors.
shares of stock given to managers on the basis of performance as measured by earnings
Preferred equity redemption stock (PERC)
Preferred stock that converts automatically into equity at a
Preferred shares give investors a fixed dividend from the company's earnings. And more
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
Certificates or book entries representing ownership in a corporation or similar entity
The tendency of small firms (in terms of total market capitalization) to outperform 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
T-period holding-period return
The percentage return over the T-year period an investment lasts.
A firm that is the object of a takeover by another firm.
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
A tax levied by a country of source on income paid, usually on dividends remitted to the
RATE OF RETURN ON STOCKHOLDERS’ EQUITY
The percentage return or profit that management made on each dollar stockholders invested in a company. Here’s how you figure it:
RATIO OF DEBT TO STOCKHOLDERS’ EQUITY
A ratio that shows which group—creditors or stockholders—has the biggest stake in or the most control of a company:
STOCKHOLDERS’ (OR OWNERS’) EQUITY
The value of the owners’ interests in a company.
Funds raised from shareholders.
The number of shares of stock that the company is legally authorized to sell.
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 number of shares that the company has sold to the public.
The number of shares that are in the hands of the public. The difference between issued shares and outstanding shares is the shares held as treasury stock.
The total amount of contributed capital and retained earnings; synonymous with stockholders' equity.
The total amount of contributed capital and retained earnings; synonymous with shareholders’ 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
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 business’s
shares that have been issued by the company.
shares that have been issued by the company and are held by investors.
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
Are equity instruments that take no security against assets, have no fixed terms of repayment and pay no fixed dividends.
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.
Are equity instruments that take no security against assets, have flexible terms of repayment and pay fixed or floating dividends.
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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