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Financial Terms | |
Limitation on liens |
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Definition of Limitation on liensLimitation on liensA bond covenant that restricts in some way a firm's ability to grant liens on its assets.
Related Terms:Debt limitationA bond covenant that restricts in some way the firm's ability to incur additional indebtedness. Dividend limitationA bond covenant that restricts in some way the firm's ability to pay cash dividends. Limitation on asset dispositionsA bond covenant that restricts in some way a firm's ability to sell major assets. Limitation on merger, consolidation, or saleA bond covenant that restricts in some way a firm's ability to Limitation on sale-and-leasebackA bond covenant that restricts in some way a firm's ability to enter into Limitation on subsidiary borrowingA bond covenant that restricts in some way a firm's ability to borrow at Allowance for bad debtsAn offset to the accounts receivable balance, against which ![]() Bad debtAn account receivable that cannot be collected. Bad debtsThe amount of accounts receivable that is not expected to be collected. bad debtsRefers to accounts receivable from credit sales to customers Cash dividendA dividend paid in cash to a company's shareholders. The amount is normally based on cash dividendPayment of cash by the firm to its shareholders. constant-growth dividend discount modelVersion of the dividend discount model in which dividends grow at a constant rate. Cost of DebtThe cost of debt (bonds, loans, etc.) that a company is charged for Cum dividendWith dividend. Cumulative dividend featureA requirement that any missed preferred or preference stock dividends be paid ![]() DebtMoney borrowed. DebtBorrowings from financiers. DebtFunds owed to another entity. Debt capacityAbility to borrow. The amount a firm can borrow up to the point where the firm value no Debt CapacityAn assessment of ability and willingness to repay a loan from anticipated future cash flow or other sources. Debt (Credit Insurance)Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. debt may or may not be secured. Debt displacementThe amount of borrowing that leasing displaces. Firms that do a lot of leasing will be Debt/equity ratioIndicator of financial leverage. Compares assets provided by creditors to assets provided Debt/Equity RatioA comparison of debt to equity in a company's capital structure. Debt FinancingRaising loan capital through the creation of debt by issuing a form of paper evidencing amounts owed and payable on specified dates or on demand. Debt instrumentAn asset requiring fixed dollar payments, such as a government or corporate bond. ![]() Debt InstrumentAny financial asset corresponding to a debt, such as a bond or a treasury bill. Debt leverageThe amplification of the return earned on equity when an investment or firm is financed Debt marketThe market for trading debt instruments. Debt ratioTotal debt divided by total assets. Debt RatioThe percentage of debt that is used in the total capitalization of a Debt reliefReducing the principal and/or interest payments on LDC loans. Debt securitiesIOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and Debt SecurityA security representing a debt relationship with an enterprise, including a government Debt serviceInterest payment plus repayments of principal to creditors, that is, retirement of debt. Debt-service coverage ratioEarnings before interest and income taxes plus one-third rental charges, divided Debt service parity approachAn analysis wherein the alternatives under consideration will provide the firm Debt swapA set of transactions (also called a debt-equity swap) in which a firm buys a country's dollar bank debt-to-equity ratioA widely used financial statement ratio to assess the Debtor in possessionA firm that is continuing to operate under Chapter 11 bankruptcy process. Debtor-in-possession financingNew debt obtained by a firm during the Chapter 11 bankruptcy process. DebtorsSales to customers who have bought goods or services on credit but who have not yet paid their debt. Discounted dividend model (DDM)A formula to estimate the intrinsic value of a firm by figuring the DividendA dividend is a portion of a company's profit paid to common and preferred shareholders. A stock DividendA payment a company makes to stockholders. Earnings before income tax. The profit a company made DividendThe payment of after-tax profits to shareholders as their share of the profits of the business for an accounting period. DividendA payment made to shareholders that is proportional to the number of shares dividendPeriodic cash distribution from the firm to its shareholders. DividendAs the term dividend relates to a corporation's earnings, a dividend is an amount paid per share from a corporation's after tax profits. Depending on the type of share, it may or may not have the right to earn any dividends and corporations may reduce or even suspend dividend payments if they are not doing well. Some dividends are paid in the form of additional shares of the corporation. dividends paid by Canadian corporations qualify for the dividend tax credit and are taxed at lower rates than other income. DividendUnlike dividends which are paid to company shareholders, participating insurance policy dividends are not based on the company's overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company's earnings and surplus. Dividend clawbackWith respect to a project financing, an arrangement under which the sponsors of a project Dividend clienteleA group of shareholders who prefer that the firm follow a particular dividend policy. For dividend discount modelComputation of today’s stock price which states that share value equals the present value of all expected future dividends. Dividend discount model (DDM)A model for valuing the common stock of a company, based on the dividend growth methoda method of computing the cost Dividend growth modelA model wherein dividends are assumed to be at a constant rate in perpetuity. Dividend incomeIncome that a company receives in the form of dividends on stock in other companies that it holds. Dividend payout ratioPercentage of earnings paid out as dividends. dividend payout ratioComputed by dividing cash dividends for the year dividend payout ratioPercentage of earnings paid out as dividends. Dividend policyAn established guide for the firm to determine the amount of money it will pay as dividends. Dividend PolicyThis policy governs Canada Life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class. Dividend rateThe fixed or floating rate paid on preferred stock based on par value. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a Dividend rightsA shareholders' rights to receive per-share dividends identical to those other shareholders receive. Dividend yield (Funds)Indicated yield represents return on a share of a mutual fund held over the past 12 dividend yield ratioCash dividends paid by a business over the most Dividend yield (Stocks)Indicated yield represents annual dividends divided by current stock price. DividendsAmounts paid to the owners of a company that represent a share of the income of the company. DividendsProfits paid out to shareholders by a corporation. Dividends per shareAmount of cash paid to shareholders expressed as dollars per share. Dividends per sharedividends paid for the past 12 months divided by the number of common shares Ex-dividendThis literally means "without dividend." The buyer of shares when they are quoted ex-dividend Ex-dividend dateThe first day of trading when the seller, rather than the buyer, of a stock will be entitled to ex-dividend dateDate that determines whether a stockholder is entitled to a dividend payment; anyone holding stock before this date is entitled to a dividend. Extra or special dividendsA dividend that is paid in addition to a firm's "regular" quarterly dividend. Firm's net value of debtTotal firm value minus total firm debt. Funded debtdebt maturing after more than one year. funded debtdebt with more than 1 year remaining to maturity. Homemade dividendSale of some shares of stock to get cash that would be similar to receiving a cash dividend. Indicated dividendTotal amount of dividends that would be paid on a share of stock over the next 12 months information content of dividendsdividend increases send good news about cash flow and earnings. dividend cuts send bad news. Interest rate on debtThe firm's cost of debt capital. Junior debt (subordinate debt)debt whose holders have a claim on the firm's assets only after senior Liquidating dividendPayment by a firm to its owners from capital rather than from earnings. Long-term debtAn obligation having a maturity of more than one year from the date it was issued. Also Long-term debtA debt for which payments will be required for a period of more than Long Term DebtLiability due in a year or more. Long-term debt/capitalizationIndicator of financial leverage. Shows long-term debt as a proportion of the Long-term debt ratioThe ratio of long-term debt to total capitalization. Long-term debt to equity ratioA capitalization ratio comparing long-term debt to shareholders' equity. Mezzanine DebtRefers to non-conventional debt that has a greater element of risk than secured debt but has less risk than equity. MM dividend-irrelevance propositionTheory that under ideal conditions, the value of the firm is unaffected by dividend policy. MM's proposition I (debt irrelevance proposition)The value of a firm is unaffected by its capital structure. Monetizing the DebtSee printing money. National DebtThe debt owed by the government as a result of earlier borrowing to finance budget deficits. That part of the debt not held by the central bank is the publically held national debt. Original issue discount debt (OID debt)debt that is initially offered at a price below par. Perfect market view (of dividend policy)Analysis of a decision on dividend policy, in a perfect capital Preferred Stock Stock that has a claim on assets and dividends of a corporation that are priorto that of common stock. Preferred stock typically does not carry the right to vote. Public DebtSee national debt. Publicly Held National DebtSee national debt. RATIO OF DEBT TO STOCKHOLDERS’ EQUITYA ratio that shows which group—creditors or stockholders—has the biggest stake in or the most control of a company: Residual dividend approachAn approach that suggests that a firm pay dividends if and only if acceptable Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |