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Definition of Greenmail
Situation in which a large block of stock is held by an unfriendly company, forcing the target
the additional value inherent in the control interest as contrasted to a minority interest, which reflects its power of control
A merger or consolidation in which an acquirer purchases the acquiree's stock.
Publicly traded issues that may be collateralized by mortgages and MBSs.
The second-largest stock exchange in the United States. It trades
Floating rate preferred stock, the dividend on which is adjusted every
The beta of a stock is determined as follows:
Brokerage firms that help to find potential buyers or sellers of large block trades.
A large trading order, defined on the New York stock Exchange as an order that consists of
A group of shareholders banding together to vote their shares in a single block.
A currency that is not freely convertible to other currencies due to exchange controls.
large and creditworthy company.
These are securities that represent equity ownership in a company. Common shares let an
Value of outstanding common shares at par, plus accumulated retained
A convertible security that is traded like an equity issue because the optioned
The market for trading equities, not including preferred stock.
Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings
Related: Unsystematic risk
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
The percentage by which the conversion price in a convertible security exceeds the
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Convertible preferred stock
Preferred stock that can be converted into common stock at the option of the holder.
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
Cumulative preferred stock
Preferred stock whose dividends accrue, should the issuer not make timely
A differential in promised yield that compensates the investor for the risk inherent in
Depository Trust Company (DTC)
DTC is a user-owned securities depository which accepts deposits of
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
Exchange of stock
Acquisition of another company by purchase of its stock in exchange for cash or shares.
Feasible target payout ratios
Payout ratios that are consistent with the availability of excess funds to make
A currency trades at a forward premium when its forward price is higher than its spot price.
Common stock of a company that has an opportunity to invest money and earn more than the
A corporation that owns enough voting stock in another firm to control management and
Common stock with a high dividend yield and few profitable investment opportunities.
Loan made by one unit of a corporation to another unit of the same corporation.
Transaction carried out between two units of the same corporation.
Law of large numbers
The mean of a random sample approaches the mean (expected value) of the
Privately placed common stock, so-called because the SEC requires a letter from the purchaser
Forward rate minus expected future short-term interest rate.
stocks that are traded on an exchange.
stocks that are traded on an exchange.
Management/closely held shares
Percentage of shares held by persons closely related to a company, as
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
New York Stock Exchange (NYSE)
Also known as the Big Board or The Exhange. More than 2,00 common
Non-cumulative preferred stock
Preferred stock whose holders must forgo dividend payments when the
The option price.
Philadelphia Stock Exchange (PHLX)
A securities exchange where American and European foreign
Preferred equity redemption stock (PERC)
Preferred stock that converts automatically into equity at a
A security that ranks junior to preferred stock but senior to common stock in the right to
A security that shows ownership in a corporation and gives the holder a claim, prior to the
Preferred stock agreement
A contract for preferred stock.
1) Amount paid for a bond above the par value.
A bond that is selling for more than its par value.
An agreement with a commitment by the seller (dealer) to buy a security back from
Repurchase of stock
Device to pay cash to firm's shareholders that provides more preferable tax treatment
Reverse stock split
A proportionate decrease in the number of shares, but not the value of shares of stock
The reward for holding the risky market portfolio rather than the risk-free asset. The spread
Risk premium approach
The most common approach for tactical asset allocation to determine the relative
Program by which a corporation buys back its own shares in the open market. It is usually
Single-premium deferred annuity
An insurance policy bought by the sponsor of a pension plan for a single
Ownership of a corporation which is represented by shares which represent a piece of the corporation's
Payment of a corporate dividend in the form of stock rather than cash. The stock dividend
Formal organizations, approved and regulated by the Securities and Exchange Commission
A firm's repurchase of outstanding shares of its common stock.
An active portfolio management technique that focuses on advantageous selection of
Balance sheet item that includes the book value of ownership in the corporation. It
Stock index option
An option in which the underlying is a common stock index.
Also called the equity market, the market for trading equities.
An option in which the underlying is the common stock of a corporation.
Stock replacement strategy
A strategy for enhancing a portfolio's return, employed when the futures
Occurs when a firm issues new shares of stock but in turn lowers the current market price of its
This is a lettered symbol assigned to securities and mutual funds that trade on U.S.financial exchanges.
Holder of equity shares in a firm.
Set of books kept by firm management for its annual report that follows Financial
The residual claims that stockholders have against a firm's assets, calculated by
Running out of inventory.
General term referring to transfer of control of a firm from one group of shareholder's to another
Target cash balance
Optimal amount of cash for a firm to hold, considering the trade-off between the
A firm that is the object of a takeover by another firm.
Target payout ratio
A firm's long-run dividend-to-earnings ratio. The firm's policy is to attempt to pay out a
Target zone arrangement
A monetary system under which countries pledge to maintain their exchange rates
The firm buys back its own stock from a potential bidder, usually at a substantial
Tender offer premium
The premium offered above the current market price in a tender offer.
Excess of the yields to maturity on long-term bonds over those of short-term bonds.
Also called time value, the amount by which the option price exceeds its intrinsic value. The
Common stock that has been repurchased by the company and held in the company's treasury.
BOOK VALUE OF COMMON STOCK
The 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:
Earnings per share of common stock
How much profit a company made on each share of common stock this year.
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:
Certificates that signify ownership in a corporation. A share of stock represents a claim on a portion of the company’s assets.
STOCKHOLDERS’ (OR OWNERS’) EQUITY
The value of the owners’ interests in a company.
A method of costing that is concerned with managing whole-of-life costs of a product/service during the product design phase – the difference between target price (to achieve market share) and the target profit margin.
Target rate of return pricing
A method of pricing that estimates the desired return on investment to be achieved from the
Shares of ownership sold to the public.
No par value stock
stock issued by the company that does not have an arbitrary value (par value) assigned to it.
Stated value stock
stock issued by the company that does not have a par value, but does have a stated value. For accounting purposes, stated value is functionally equivalent to par value.
The total amount of contributed capital and retained earnings; synonymous with shareholders’ equity.
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