|Policy Acquisition Costs|
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Definition of Policy Acquisition Costs
Policy Acquisition Costs
costs incurred by insurance companies in signing new policies, including expenditures on commissions and other selling expenses, promotion expenses, premium
A monetary policy of matching wage and price increases with money supply increases so that the real money supply does not fall and push the economy into recession.
Takeover of a firm by purchase of that firm’s common
A merger or consolidation in which an acquirer purchases the selling firm's assets.
A merger or consolidation in which an acquirer purchases the acquiree's stock.
The incremental costs of having an agent make decisions for a principal.
costs that are identifiable with and able to be influenced by decisions made at the business
A policy designed to increase an economy's prosperity at the expense of another country's prosperity.
When a cost is recorded originally as an increase
costs that increase with increases in the level of investment in current assets.
costs of maintaining current assets, including opportunity cost of capital.
Decreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism.
Procedures followed by a firm in attempting to collect accounts receivables.
Procedures to collect and monitor receivables.
Assets acquired to create money. May include plant, machinery and equipment, shares of another company etc.
The acquisition of one firm by anther firm.
Costs Capitalized in Stealth
A particularly egregious form of aggressive cost capitalization
costs of financial distress
costs arising from bankruptcy or distorted business decisions before bankruptcy.
Creative Acquisition Accounting
The allocation to expense of a greater portion of the price
Standards set to determine the amount and nature of credit to extend to customers.
A company’s stated goal for how soon a customer order will be
Demand Management Policy
Fiscal or monetary policy designed to influence aggregate demand for goods and services.
costs that are readily traceable to particular products or services.
A policy that is a conscious, considered response to each situation as it arises. Contrast with policy rule.
An established guide for the firm to determine the amount of money it will pay as dividends.
This 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.
The difference between the execution price of a security and the price that would have
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
The use of government spending and taxing for the specific purpose of stabilizing the economy.
A change in government spending or taxing, designed to influence economic activity.
costs that do not change with increases or decreases in the volume of goods or services
costs that do not depend on the level of output.
fixed expenses (costs)
Expenses or costs that remain the same in amount,
costs, both implied and direct, associated with a transaction. Such costs include time, effort,
The price of obtaining capital, either borrowed or equity, with intent to carry on business operations.
Merger between two companies producing similar goods or services.
A policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example.
Incremental costs and benefits
costs and benefits that would occur if a particular course of action were
costs that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead.
Transaction costs that include the assessment of the investment merits of a financial asset.
Insurance Policy (Credit Insurance)
A policy under which the insurance company promises to pay a benefit of the person who is insured.
Joint Policy Life
One insurance policy that covers two lives, and generally provides for payment at the time of the first insured's death. It could also be structured to pay on second death basis for estate planning purposes.
A course of action adopted by a financial institution to guide and usually determine present and future decisions in the light of given conditions.
Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.
Market timing costs
costs that arise from price movement of the stock during the time of the transaction
The costs to firms of changing their prices.
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Actions taken by the central bank to change the supply of money and the interest rate and thereby affect economic activity.
A type of insurance policy or annuity in which the owner does not receive dividends.
The difference in the performance of an actual investment and a desired investment
Overhead generally refers to indirect, in contrast to direct,
A policy offers the potential of sharing in the success of an insurance company through the receipt of dividends.
Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital
The costs that relate to a period of time.
A written document that serves as evidence of insurance coverage and contains pertinent information about the benefits, coverage and owner, as well as its associated directives and obligations.
Yearly event linked to a policy. Usually the date issued.
Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an
Date on which the insurance company assumes responsibilities for the obligations outlined in a policy.
This is an administrative fee which is part of most life insurance policies. It ranges from about $40 to as much as $100 per year per policy. It is not a separate fee. It is incorporated in the regular monthly, quarterly, semi-annual or annual payment that you make for your policy. Knowing about this hidden fee is important because some insurance companies offer a policy fee discount on additional policies purchased under certain conditions. Sometimes they reduce the policy fee or waive it altogether on one or more additional policies purchased at the same time and billed to the same address. The rules are slightly different depending on the insurance company. There could be enormous savings if several people in the same family or business were intending to purchase coverage at the same time.
Administrative charge included in a policy Premium.
Theory that anticipated policy has no effect on output.
A formula for determining policy. Contrast with discretionary policy.
Period between two policy anniversaries.
This is the person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation. There are instances in marriage breakup (or relationship breakup with dependent children) where appropriate life insurance on the support provider, owned and paid for by the ex-spouse receiving the support is an acceptable method of ensuring future security.
The person who owns and holds all rights under the policy, including the power to name and change beneficiaries, make a policy loan, assign the policy to a financial institution as collateral for a loan, withdraw funds or surrender the policy.
The costs of additional regulation, including higher taxes, borne by large and
A form of start-up cost incurred in preparing for the opening of a new store or facility.
Price impact costs
Related: market impact costs
Round-trip transactions costs
costs of completing a transaction, including commissions, market impact
costs associated with locating a counterparty to a trade, including explicit costs (such as
costs that are constant within a defined level of activity but that can increase or decrease when
costs that have both fixed and variable components.
costs incurred from shortages in current assets.
Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors
A budget cost for materials and labour used for decision-making, usually expressed as a per unit cost that is applied to standard quantities from a bill of materials and to standard times from a
costs related to such onetime activities as opening a new facility, introducing
costs that have been incurred and cannot be reversed.
costs that have been incurred in the past.
costs that have been incurred and cannot be recovered.
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
Tax free acquisition
A merger or consolidation in which 1) the acquirer's tax basis in each asset whose
Tax-Related Incomes Policy (TIP)
Tax incentives for labor and business to induce them to conform to wage/price guidelines.
A merger or consolidation that is not a tax-fee acquisition. The selling shareholders are
costs of buying and selling marketable securities and borrowing. Trading costs include
Traditional view (of dividend policy)
An argument that "within reason," investors prefer large dividends to
The time, effort, and money necessary, including such things as commission fees and the
Undepreciated Capital Costs
The tax definition of the value of an asset that is eligible for tax deprecation.
costs that change as the level of output changes.
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
acquisition in which the acquired firm and the acquiring firm are at different steps in the
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