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Definition of Proxy contest
A battle for the control of a firm in which the dissident group seeks, from the firm's other
Takeover attempt in which outsiders compete with management for shareholders’ votes. Also called proxy fight.
Document intended to provide shareholders with information necessary to vote in an informed manner
Vote cast by one person on behalf of another.
This clause in regular life insurance policy provides for voiding the contract of insurance for up to two years from the date of issue of the coverage if the life insured has failed to disclose important information or if there has been a misrepresentation of a material fact which would have prevented the coverage from being issued in the first place. After the end of two years from issue, a misrepresentation of smoking habits or age can still void or change the policy.
the additional value inherent in the control interest as contrasted to a minority interest, which reflects its power of control
an amount or percentage deducted from a pro rata share of the value of 100% of an equity interest in a business, to reflect the absence of some or all of the powers of control.
present value of a perpetuity with growth.
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).
the period before a formal announcement of a Takeover bid in which one or more bidders are either preparing to make an announcement or speculating that someone else will.
The option of terminating an investment earlier than originally planned.
This doctrine says that a nation is sovereign within its own borders and its domestic
A bond covenant that specifies certain actions the firm must take.
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
Also called surplus management, the task of managing funds of a financial
information that is known to some people but not to other people.
Number of shares authorized for issuance by a firm's corporate charter.
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
Bankruptcy cost view
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
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the
Foreign bond issue made in London.
The foreign market in the United Kingdom.
Mortgages in which monthly payments consist of principal and interest, with portions of these
Cash management bill
Very short maturity bills that the Treasury occasionally sells because its cash
The combination of all of the individual opinions about a stock's or security's value.
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
Sufficient ability or fitness for ones needs. Possessing the necessary abilities to be qualified to
he written statement that follows any "trade" in the securities markets. Confirmation is issued
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
Continuous random variable
A random value that can take any fractional value within specified ranges, as
50% of the outstanding votes plus one vote.
A service that provides for a single presentation of checks each day (typically in
Controlled foreign corporation (CFC)
A foreign corporation whose voting stock is more than 50% owned
The corporate manager responsible for the firm's accounting activities.
An annual statement filed by a life insurance company in each state where it does
Primary area of competence. Narrowly defined fields or tasks at which a company or
Corporate financial management
The application of financial principals within a corporation to create and
The periodic interest payment made to the bondholders during the life of the bond.
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 ability of the bankruptcy court to confirm a plan of reorganization over the objections of
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Related: Benchmark issues
Facility provided by the Fed enabling member banks to borrow reserves against collateral
Discrete random variable
A random variable that can take only a certain specified set of discrete possible
A shareholders' rights to receive per-share dividends identical to those other shareholders receive.
Doctrine of sovereign immunity
doctrine that says a nation may not be tried in the courts of another country
Documented discount notes
Commercial paper backed by normal bank lines plus a letter of credit from a
Municipal revenue bonds for which quotes are given in dollar prices. Not to be confused with
The product of modified duration and the initial price.
Dollar price of a bond
Percentage of face value at which a bond is quoted.
The return realized on a portfolio for any evaluation period, including (1) the change in market
Similar to the reverse repurchase agreement - a simultaneous agreement to sell a security held in a
Dollar safety margin
The dollar equivalent of the safety cushion for a portfolio in a contingent immunization
Dollar-weighted rate of return
Also called the internal rate of return, the interest rate that will make the
Domestic International Sales Corporation (DISC)
A U.S. corporation that receives a tax incentive for
Part of a nation's internal market representing the mechanisms for issuing and trading
Don't know (DK, Dked)
"don't know the trade." A Street expression used whenever one party lacks
Method of accelerated depreciation.
A cross-border lease in which the disparate rules of the lessor's and lessee's countries let
Agreement between two countries that taxes paid abroad can be offset against
A sinking fund provision that may allow repurchase of twice the required number of bonds
Dow Jones industrial average
This is the best known U.S.index of stocks. It contains 30 stocks that trade on
Barrier option that comes into existence if asset price hits a barrier.
Barrier option that expires if asset price hits a barrier.
A classic negative change in ratings for a stock, and or other rated security.
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
A value determined within the context of a model.
Investment funds established for the support of institutions such as colleges, private
This is an American dollar that has been deposited in a European bank or an U.S. bank branch
Eurobonds denominated in U.S.dollars.
Buying or selling to offset an existing market position.
Governmental restrictions on the purchase of foreign currencies by domestic citizens or
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
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.
The management of a firm's costs and expenses in order to control them in relation to
Refers to an order to buy or sell that can be executed without confirmation for some fixed period. Also,
Firm commitment underwriting
An undewriting in which an investment banking firm commits to buy the
Firm's net value of debt
Total firm value minus total firm debt.
See:diversifiable risk or unsystematic risk.
Conventional bonds for which the coupon rate is set as a fixed percentage of the par value.
A nonnegotiable debt security that can be redeemed at some fixed price or according to
Flat price (also clean price)
The quoted newspaper price of a bond that does not include accrued interest.
The amount of securities believed to be available for immediate purchase, that is, in the
Foreign exchange controls
Various forms of controls imposed by a government on the purchase/sale of
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
Gross domestic product (GDP)
The market value of goods and services produced over time including the
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.
Income statement (statement of operations)
A statement showing the revenues, expenses, and income (the
A situation involving information that is known to some, but not all, participants.
Information Coefficient (IC)
The correlation between predicted and actual stock returns, sometimes used to
Transaction costs that include the assessment of the investment merits of a financial asset.
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