|Short-term tax exempts|
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Definition of Short-term tax exempts
Short-term tax exempts
short-term securities issued by states, municipalities, local housing agencies, and
The ratio of net income to net sales.
Money after-tax rate of return minus the inflation rate.
A situation wherein participants in a transaction have different net tax rates.
taxes as a fraction of income; total taxes divided by total taxable income.
The ratio of net income before taxes to net sales.
The tax rate at which a party to a prospective transaction is indifferent between entering
Net income plus depreciation.
A measure of the goodness of fit of the relationship between the dependent and
The argument that double (corporate and individual) taxation of equity returns makes
Rate of return required on a par bond to produce the same after-tax yield to
A non-cash expense that provides a source of free cash flow. Amount allocated during the
The value of the tax write-off on depreciation of plant and equipment.
Liability-matching models that assume that the liability payments and the asset cash
Withdrawal of funds from a financial institution in order to invest them directly.
Agreement between two countries that taxes paid abroad can be offset against
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
Euro-medium term note (Euro-MTN)
A non-underwritten Euronote issued directly to the market. Euro-
Institutions that provide the market function of matching borrowers and lenders or
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
Interest equalization tax
tax on foreign investment by residents of the U.S. which was abolished in 1974.
Interest tax shield
The reduction in income taxes that results from the tax-deductibility of interest payments.
spread The spread between the interest rate offered in two sectors of the bond market for
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
Typically 1-10 years.
Investment through a financial institution. Related: disintermediation.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.
Liquidity theory of the term structure
A biased expectations theory that asserts that the implied forward
In accounting information, one year or greater.
Value of property, equipment and other capital assets minus the depreciation. This is an
An obligation having a maturity of more than one year from the date it was issued. Also
Indicator of financial leverage. Shows long-term debt as a proportion of the
Long-term debt ratio
The ratio of long-term debt to total capitalization.
Long-term financial plan
Financial plan covering two or more years of future operations.
Amount owed for leases, bond repayment and other items due after 1 year.
Long-term debt to equity ratio
A capitalization ratio comparing long-term debt to shareholders' equity.
Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.
A corporate debt instrument that is continuously offered to investors over a period of
Other long term liabilities
Value of leases, future employee benefits, deferred taxes and other obligations
Personal tax view (of capital structure)
The argument that the difference in personal tax rates between
Progressive tax system
A tax system wherein the average tax rate increases for some increases in income but
If an investor thinks the price of a stock is going down, the investor could borrow the stock from
One who has sold a contract to establish a market position and who has not yet closed out this position
Bonds with short current maturities.
See: unmatched book.
The sale of a futures contract(s) to eliminate or lessen the possible decline in value ownership of
This is the total number of shares of a security that investors have borrowed, then sold in the
Occurs when a person sells stocks he or she does not yet own. Shares must be borrowed,
Selling a security that the seller does not own but is committed to repurchasing eventually. It is
Establishing a market position by selling a security one does not own in anticipation of the price
A situation in which a lack of supply tends to force prices upward.
A straddle in which one put and one call are sold.
Costs that fall with increases in the level of investment in current assets.
The risk of falling short of any investment target.
Short-run operating activities
Events and decisions concerning the short-term finance of a firm, such as
Short-term financial plan
A financial plan that covers the coming fiscal year.
Short-term investment services
Services that assist firms in making short-term investments.
Short-term solvency ratios
Ratios used to judge the adequacy of liquid assets for meeting short-term
Split-rate tax system
A tax system that taxes retained earnings at a higher rate than earnings that are
TANs (tax anticipation notes)
tax anticipation notes issued by states or municipalities to finance current
Tax anticipation bills (TABs)
Special bills that the Treasury occasionally issues that mature on corporate
Set of books kept by a firm's management for the IRS that follows IRS rules. The stockholder's
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
The municipal bond market where state and local governments raise funds. Bonds issued
Tax free acquisition
A merger or consolidation in which 1) the acquirer's tax basis in each asset whose
A nation with a moderate level of taxation and/or liberal tax incentives for undertaking specific
Tax Reform Act of 1986
A 1986 law involving a major overhaul of the U.S. tax code.
The reduction in income taxes that results from taking an allowable deduction from taxable income.
Swapping two similar bonds to receive a tax benefit.
Tax deferral option
The feature of the U.S. Internal Revenue Code that the capital gains tax on an asset is
Tax-deferred retirement plans
Employer-sponsored and other plans that allow contributions and earnings to
The option to sell an asset and claim a loss for tax purposes or not to sell the asset and
A merger or consolidation that is not a tax-fee acquisition. The selling shareholders are
Gross income less a set of deductions.
Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.
Often referred to as bullet-maturity bonds or simply bullet bonds, bonds whose principal is
Term Fed Funds
Fed Funds sold for a period of time longer than overnight.
Term life insurance
A contract that provides a death benefit but no cash build-up or investment component.
A bank loan, typically with a floating interest rate, for a specified amount that matures in between
Provides a death benefit only, no build-up of cash value.
A repurchase agreement with a term of more than one day.
Term to maturity
The time remaining on a bond's life, or the date on which the debt will cease to exist and
Excess of the yields to maturity on long-term bonds over those of short-term bonds.
A closed-end fund that has a fixed termination or maturity date.
The value of a bond at maturity, typically its par value, or the value of an asset (or an entire
Terms of sale
Conditions on which a firm proposes to sell its goods services for cash or credit.
Terms of trade
The weighted average of a nation's export prices relative to its import prices.
Two-tier tax system
A method of taxation in which the income going to shareholders is taxed twice.
Method of indirect taxation whereby a tax is levied at each stage of production on the value
A tax levied by a country of source on income paid, usually on dividends remitted to the
What the business paid to the IRS.
Bills that are payable in more than one year, such as a mortgage or bonds.
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
Amounts owing after more than one year.
Profit before interest and taxes (PBIT)
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