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Definition of Living Will
This is a will which specifically expresses the testator's desire not to be kept alive on life support machines, should the occasion arise.
Excess of the purchase price over the fair market value of the net assets acquired under purchase
The excess of the price paid to buy another company over the book value of
A term used to describe a situation in which a business combination
Some insurance companies include this benefit option at no cost to their policy holders. The insurer considers on a case to case basis, the need for insurance funds before death. If the insured can demonstrate a shortened life of less than two years and with some insurers one year, the insurer will consider releasing up to 50% or a maximum of $100,000 of the life insurance coverage held by the insured. Not all insurers offer this benefit for free. The need has resulted in specific stand alone living benefit/critical illness policies coming into existence. Look under "Different types of Life Insurance" for further information. You might have heard of "Viatical Settlements", the practice of seriously ill people selling the rights to their life insurance policies to third parties. This practice is common in the United States but has not caught on in Canada.
This is a legal document detailing how you want your assets to be distributed upon your death. You may also stipulate how you wish to be buried or who you would like to take care of any surviving dependent family members. In my opinion, it is very important to be quite specific about your wishes for the distribution of special assets such as the antique grandfather clock, the classic silver tea set or the antique piano. If you think that your beneficiaries may dispute how your things are to be distributed, consider stipulating that an auction be held in which all beneficiaries may bid on the item which they value and all moneys collected are then shared in the same manner in which you distributed your other liquid assets. Your might want to remember that a will is automatically revoked upon marriage unless the will specifically states that the will is made in contemplation of marriage.
Intangible assets of a firm established by the excess of the price paid for the going concern over the value of its assets.
an amount or percentage deducted from an equity interest to reflect lack of marketability.
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in today’s dollars of cash flows that occur in different time periods.
model for calculating DLOM for minority interests r the discount rate
Schedule of depreciation rates allowed for tax purposes.
The change in the value of a firm's foreign currency denominated accounts due to a
Earnings of a firm as reported on its income statement.
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
The ease and quickness with which assets can be converted to cash.
Accounts receivable turnover
The ratio of net credit sales to average accounts receivable, a measure of how
Acquisition of assets
A merger or consolidation in which an acquirer purchases the selling firm's assets.
Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity
Agency cost view
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
Total costs, explicit and implicit.
An arrangement whereby a security issue is canceled if the underwriter is unable
Arm's length price
The price at which a willing buyer and a willing unrelated seller would freely agree to
A dealer's price to sell a security; also called the offer price.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
The ratio of net sales to total assets.
A firm's productive resources.
A common element of a financial plan that describes projected capital spending and the
markets in which the prevailing price is determined through the free interaction of
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
Also referred to as the weighted-average life (WAL). The average number of years that each
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
Gives the lessee the option to purchase the asset at a price below fair market
price expressed in terms of yield to maturity or annual rate of return.
Any market in which prices are in a declining trend.
This is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically
An illegal market.
Large and creditworthy company.
With respect to convertible bonds, the value the security would have if it were not convertible
A banker or trader's positions.
cash A firm's cash balance as reported in its financial statements. Also called ledger cash.
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
The managing underwriter for a new issue. The book runner maintains the book of securities sold.
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
Book value per share
The ratio of stockholder equity to the average number of common shares. book value
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the
A market where an intermediary offers search services to buyers and sellers.
Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the
Any market in which prices are in an upward trend.
The foreign market in the United Kingdom.
To purchase an asset; taking a long position.
To cover, offset or close out a short position. Related: evening up, liquidation.
Buy limit order
A conditional trading order that indicates a security may be purchased only at the designated
Buy on close
To buy at the end of the trading session at a price within the closing range.
Buy on margin
A transaction in which an investor borrows to buy additional shares, using the shares
Buy on opening
To buy at the beginning of a trading session at a price within the opening range.
A passive investment strategy with no active buying and selling of stocks from the
Mortgages in which monthly payments consist of principal and interest, with portions of these
Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is
another term for a repo.
A financial analyst employed by a non-brokerage firm, typically one of the larger money
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
The price for which a bond can be repaid before maturity under a call provision.
The market for trading long-term debt instruments (those that mature in more than one year).
Capital market efficiency
Reflects the relative amount of wealth wasted in making transactions. An efficient
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
Capital market line (CML)
The line defined by every combination of the risk-free asset and the market portfolio.
costs that increase with increases in the level of investment in current assets.
Cash flow coverage ratio
The number of times that financial obligations (for interest, principal payments,
Also called spot markets, these are markets that involve the immediate delivery of a security
An amount the insurance company will pay if the policyholder ends a whole life
Bond price excluding accrued interest.
A transaction in which the purchaser's intention is to reduce or eliminate a short position in
An agreement between two or more countries that permits the free movement of capital
Common stock market
The market for trading equities, not including preferred stock.
Related: Unsystematic risk
Complete capital market
A market in which there is a distinct marketable security for each and every
An undertaking either (1) to complete a project such that it meets certain specified
Consumer Price Index (CPI)
The CPI, as it is called, measures the prices of consumer goods and services and is a
Conversion parity price
Related:market conversion price
The contractually specified price per share at which a convertible security can be
Also called parity value, the value of a convertible security if it is converted immediately.
Corner A Market
To purchase enough of the available supply of a commodity or stock in order to
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
Cost of capital
The required return for a capital budgeting project.
Cost of carry
Related: net financing cost
Cost of funds
Interest rate associated with borrowing money.
Cost of lease financing
A lease's internal rate of return.
Cost of limited partner capital
The discount rate that equates the after-tax inflows with outflows for capital
The net present value of an investment divided by the investment's initial cost. Also called
The purchase of a contract to offset a previously established short position.
Ratios used to test the adequacy of cash flows generated through earnings for purposes of
A short call option position in which the writer owns the number of shares of the underlying
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
A put option position in which the option writer also is short the corresponding stock or has
The return at which two alternative projects have the same net present value.
value of cash, accounts receivable, inventories, marketable securities and other assets that
A market where traders specializing in particular commodities buy and sell assets for their
The market for trading debt instruments.
Debt-service coverage ratio
Earnings before interest and income taxes plus one-third rental charges, divided
Deferred nominal life annuity
A monthly fixed-dollar payment beginning at retirement age. It is nominal
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