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Definition of Oversubscription privilege
In a rights issue, arrangement by which shareholders are given the right to apply
Goods may be returned to the seller by the purchaser without restrictions.
Total quantity of goods and services supplied.
Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign
A right of shareholders in a merger to demand the payment of a fair price for their shares, as
Number of shares authorized for issuance by a firm's corporate charter.
The number of shares of stock that the company is legally authorized to sell.
1) When bond yields and prices fall, the market is said to back-up.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
The reorganization or liquidation of a firm that cannot pay its debts.
The argument that expected indirect and direct bankruptcy costs offset the other
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely
Also called on-the-run or current coupon issues or bellwether issues. In the secondary
Large and creditworthy company.
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
Cheapest to deliver issue
The acceptable Treasury security with the highest implied repo rate; the rate that a
Are equity instruments that take no security against assets, have no fixed terms of repayment and pay no fixed dividends.
Assets acquired to create money. May include plant, machinery and equipment, shares of another company etc.
company cost of capital
Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.
Related: Unsystematic risk
See asset-specific risk
Term life insurance products are offered as non-convertible or convertible to a certain time in the future. The coversion right has a time limit, usually to the policy holder's age 60 or possibly even age 70. This right means that the policy holder has the right to convert their existing policy to another specific different plan of permanent insurance within the specified time period, without providing evidence of insurability. There is a slightly higher cost for a term policy with the conversion priviledge but it is a valuable feature should a policy holder's health change for the worst and continued insurance coverage becomes a necessity.
Cost company arrangement
arrangement whereby the shareholders of a project receive output free of
The periodic interest payment made to the bondholders during the life of the bond.
Detachable certificate attached to a bond that shows the amount of
The interest payments paid to the bondholder.
The annual interest payment associated with a bond.
any bond with a coupon. Contrast with discount bond.
Coupon / Coupons
The periodic interest payment(s) made by the issuer of a bond
The dates when the coupons are paid. Typically a bond pays
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
A bond's interest payments.
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
The rate of interest paid on a debt security. Generally stated on an
The nominal interest rate that the issuer promises to pay the
Annual interest payment as a percentage of face value.
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Related: Benchmark issues
In Treasury securities, the most recently auctioned issue. Trading is more active in current
Depository Trust Company (DTC)
DTC is a user-owned securities depository which accepts deposits of
A shareholders' rights to receive per-share dividends identical to those other shareholders receive.
Eurobonds that pay coupon interest in one currency but pay the principal in a different
dual pricing arrangement
a transfer pricing system that allows
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Emerging Issues Task Force (EITF)
A special committee of the Financial Accounting Standards Board established to reach consensus of how to account for new and unusual financial transactions that have the potential for creating differing financial reporting practices.
Emerging Issues Task Force (EITF)
A separate committee within the Financial Accounting Standards Board composed of 13 members representing CPA firms and preparers of financial statements
equivalent units of production (EUP)
an approximation of the number of whole units of output that could have been
Securities sold in the Euromarket. That is, securities initially sold to investors
Buying or selling to offset an existing market position.
In connection with a rights offering, shares of stock that are trading without the rights attached.
The date on which a share of common stock begins trading ex-rights.
A situation in which supply exceeds demand.
Company engaged in making loans to individuals or businesses. Unlike a bank, it does not receive deposits from the public.
The amount of securities believed to be available for immediate purchase, that is, in the
Foreign Corrupt Practices Act (FCPA)
a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and
Full coupon bond
A bond with a coupon equal to the going market rate, thereby, the bond is selling at par.
Fully diluted earnings per shares
Earnings per share expressed as if all outstanding convertible securities
The loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon
Group Life Insurance
This is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
Group of five (G5/G-5)
The five leading countries (France, Germany, Japan, United Kingdom, and the U.S.) that
Group of seven (G7/G-7)
The G-5 countries plus Canada and Italy.
Group rotation manager
A top-down manager who infers the phases of the business cycle and allocates
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
A corporation that owns enough voting stock in another firm to control management and
A firm licensed to sell insurance to the public.
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.
A transaction used to record the reduction in inventory from a location,
A particular financial asset.
When an item is approved and released for sale, or when a policy or sales contract is accepted.
Age of an insured as at the policy issue date, using "age nearest" next birthday formula.
The date a security is first offered for sale. That date usually
Date on which a policy is approved.
Issued share capital
Total amount of shares that are in issue. Related: outstanding shares.
The number of shares that the company has sold to the public.
shares that have been issued by the company.
An entity that issues a financial asset.
A legal proceeding for liquidating or reorganizing a business.
Bond with a stream of coupon payments that are the same throughout the life of the bond.
limited liability company
an organizational form that is a hybrid of the corporate and partnership organizational
The rights of a firm's securityholders in the event the firm liquidates.
CDs that are issued with the tacit understanding that the buyer will not trade the certificate.
1) Bonds or notes with a long current maturity.
1) Bonds or notes with a long current maturity.
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
Management/closely held shares
Percentage of shares held by persons closely related to a company, as
The amount added to a lower figure to reach a higher figure, expressed as a percentage of the
the period after an announcement of a takeover bid in which stock prices typically rise until a merger or acquisition is made (or until it falls through).
An increase in the cost of a product to arrive at its selling price.
M1-A: Currency plus demand deposits
Under the GNMA-II program, pools formed through the aggregation of individual
The market in which a new issue of securities is first sold to investors.
The cost of the supplies used in running an office.
Original issue discount debt (OID debt)
Debt that is initially offered at a price below par.
Actual forward rate expressed in dollars per currency unit, or vice versa.
shares that are currently owned by investors.
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.
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