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Definition of Poison pill
Anit-takeover device that gives a prospective acquiree's shareholders the right to buy shares of the
Measure taken by a target firm to avoid acquisition;
A covenant allowing the bondholder to demand repayment in the event of a hostile merger.
An option granting the right to sell the underlying futures contract. Opposite of a call.
An option to sell a stipulated amount of stock or securities within a
a system using computer graphics for product designs
the use of computers to control production processes through numerically
the integration of two or more flexible manufacturing systems through the use of a host computer and an information networking system
A put option position in which the option writer also is short the corresponding stock or has
The level of output produced by the economy when operating at the natural rate of unemployment.
Arrangement by which investors who receive a dividend also receive a tax credit for
To assign a value to a good or service in place of a market value that is not available.
The value of consumption services obtained by owning one's house rather than having to pay rent.
a number (prefaced as a multiplier
Tables that indicate how much each industry requires of the production of each other
The difference between full employment output and current output.
Potential Output or Potential GDP
Output produced when the economy is operating at its natural rate of unemployment.
Protective put buying strategy
A strategy that involves buying a put option on the underlying security that is
Put an option
To exercise a put option.
A bond that the holder may choose either to exchange for par value at some date or to extend for a
Put-call parity relationship
The relationship between the price of a put and the price of a call on the same
This security gives investors the right to sell (or put) fixed number of shares at a fixed price within
A contract that gives the holder the right to sell an asset for a
Right to sell an asset at a specified exercise price on or before the exercise date.
Contract that grants the right to sell at a specified price at some time in the future.
The price at which the asset will be sold if a put option is exercised. Also called the strike or
Gives the holder of a floating-rate bond the right to redeem his note at par on the coupon
A financial tool in which the buyer has the right, or option, to enter into a swap as a floatingrate
The process of moving received items to storage and recording the related
A bond that allows the holder to redeem the bond at a
the total completed and sold output of a plant during a period
An agreement to put a specified amount of product per period through a particular
Sales revenue less the cost of materials.
Transferable put right
An option issued by the firm to its shareholders to sell the firm one share of its
A short put option position in which the writer does not have a corresponding short stock
accounting rate of return (ARR)
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
accounts receivable turnover ratio
A ratio computed by dividing annual
acid test ratio (also called the quick ratio)
The sum of cash, accounts receivable, and short-term marketable
a measure of the demands on activities and,
Aggregate Production Function
An equation determining aggregate output as a function of aggregate inputs such as labor and capital.
a logical step-by-step problem-solving technique
approximated net realizable value at split-off allocation
a method of allocating joint cost to joint products using a
asset turnover ratio
A broad-gauge ratio computed by dividing annual
The receipt of an exercise notice by an options writer that requires the writer to sell (in the case
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
Back To Back Annuity
This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.
In the words of Warren Buffet, Bill Bane Sr., is, "a great American and one of the last real traders
A computer message system linking major banks. It is used not for effecting payments, but as a
The term applied to the liberalization in 1986 of the London Stock Exchange in which trading was
The method used for computing the bond-equivalent yield.
The annualized yield to maturity computed by doubling the semiannual yield.
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
The annual sales volume level at which total contribution
The sales level at which a company, division, or product line makes a
the difference between total actual overhead
A spread strategy in which an investor buys an out-of-the-money put option, financing it by
an incidental output of a joint process; it is salable,
a. An option to buy a certain quantity of a stock or commodity for a
A bond that allows the issuer to buy back the bond at a
Income payments to factors of production are spent to buy output. The receipts from these sales are used to pay factors of production, creating a circular flow of income.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
A strategy in which a put and with the same strike price and expiration are either both
the time between each interest computation
The amount put into the business by the owners by purchasing stock and by paying more than the par value for the stock (additional paid-in capital or capital in excess of par).
contribution margin ratio
the proportion of each revenue dollar remaining after variable costs have been covered;
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
Anything for which a measurement of cost is required – inputs, processes, outputs or responsibility centres.
cost of production report
a process costing document that
a database providing information about the impact
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
Interest rate used to compute present values of future cash flows.
dividend discount model
Computation of today’s stock price which states that share value equals the present value of all expected future dividends.
dividend growth method
a method of computing the cost
dividend payout ratio
Computed by dividing cash dividends for the year
A strategy that involves rebalancing hedge positions as market conditions change; a
The European, Australian, and Far East stock index, computed by Morgan Stanley.
In project financing, the risk that the project's output will not be salable at a price that will
Effective annual yield
Annualized interest rate on a security computed using compound interest techniques.
Effective Annual Yield
Annualized rate of return on a security computed using compound
a measure of how well an organization’s goals
a measure of the degree to which tasks were performed
Electronic data interchange (EDI)
The exchange of information electronically, directly from one firm's
electronic data interchange (EDI)
the computer-to-computer transfer of information in virtual real time using standardized formats developed by the American National Standards Institute
Enterprise resource planning system
A computer system used to manage all company
equivalent units of production (EUP)
an approximation of the number of whole units of output that could have been
To implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of
The price set for buying an asset (call) or selling an asset (put).
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
An informal term that refers to the variety of long-term operating
Costs that do not depend on the level of output.
fixed overhead spending variance
the difference between the total actual fixed overhead and budgeted fixed overhead;
flexible manufacturing system (FMS)
a production system in which a single factory manufactures numerous variations
The profit earned on the sale of an asset, computed by subtracting its book value
Geometric mean return
Also called the time weighted rate of return, a measure of the compounded rate of
Gross Domestic Product
Total output of final goods and services produced within a country during a year.
Gross National Product
Total output of final goods and services produced by a country's citizens during a year.
A strategy designed to reduce investment risk using call options, put options, short selling, or futures
A contract that obligates a purchaser of a project's output to make cash
Homogenous expectations assumption
An assumption of Markowitz portfolio construction that investors
An illustration is a computer-generated spreadsheet that takes into account a number of assumptions in order to show how a specific policy might perform for a specific individual.
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