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Start-up Costs |
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Definition of Start-up CostsStart-up Costscosts related to such onetime activities as opening a new facility, introducing
Related Terms:markupthe 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). runupthe 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. Agency costsThe incremental costs of having an agent make decisions for a principal. Back-up1) When bond yields and prices fall, the market is said to back-up. BankruptcyState of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Bankruptcy riskThe risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk. Bankruptcy viewThe argument that expected bankruptcy costs preclude firms from being financed entirely Bottom-up equity management styleA management style that de-emphasizes the significance of economic Carring costscosts that increase with increases in the level of investment in current assets. CouponThe periodic interest payment made to the bondholders during the life of the bond. Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Coupon paymentsA bond's interest payments. Coupon rateIn bonds, notes or other fixed income securities, the stated percentage rate of interest, usually Current couponA bond selling at or close to par, that is, a bond with a coupon close to the yields currently Current-coupon issuesRelated: Benchmark issues Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms Evening upBuying or selling to offset an existing market position. Execution costsThe difference between the execution price of a security and the price that would have Financial distress costsLegal and administrative costs of liquidation or reorganization. Also includes Floating supplyThe amount of securities believed to be available for immediate purchase, that is, in the Friction costscosts, both implied and direct, associated with a transaction. Such costs include time, effort, Full coupon bondA bond with a coupon equal to the going market rate, thereby, the bond is selling at par. Give upThe loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon 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 managerA top-down manager who infers the phases of the business cycle and allocates High-coupon bond refundingRefunding of a high-coupon bond with a new, lower coupon bond. Incremental costs and benefitscosts and benefits that would occur if a particular course of action were Information costsTransaction costs that include the assessment of the investment merits of a financial asset. Legal bankruptcyA legal proceeding for liquidating or reorganizing a business. Level-coupon bondBond with a stream of coupon payments that are the same throughout the life of the bond. Lock-up CDsCDs that are issued with the tacit understanding that the buyer will not trade the certificate. Long coupons1) Bonds or notes with a long current maturity. Low-coupon bond refundingRefunding of a low coupon bond with a new, higher coupon bond. Long coupons1) Bonds or notes with a long current maturity. Market impact costsAlso called price impact costs, the result of a bid/ask spread and a dealer's price concession. Market timing costscosts that arise from price movement of the stock during the time of the transaction Money supplyM1-A: Currency plus demand deposits Opportunity costsThe difference in the performance of an actual investment and a desired investment Pass-through coupon rateThe interest rate paid on a securitized pool of assets, which is less than the rate Pay-upThe loss of cash resulting from a swap into higher price bonds or the need/willingness of a bank or PickupThe gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds. Prepackaged bankruptcyA bankruptcy in which a debtor and its creditors pre-negotiate a plan or Price impact costsRelated: market impact costs Pure yield pickup swapMoving to higher yield bonds. Raw material supply agreementAs used in connection with project financing, an agreement to furnish a Round-trip transactions costscosts of completing a transaction, including commissions, market impact Search costscosts associated with locating a counterparty to a trade, including explicit costs (such as Selling groupAll banks involved in selling or marketing a new issue of stock or bonds Step-upTo increase, as in step up the tax basis of an asset. Step-up bondA bond that pays a lower coupon rate for an initial period which then increases to a higher Sunk costscosts that have been incurred and cannot be reversed. SupermajorityProvision in a company's charter requiring a majority of, say, 80% of shareholders to approve Supply shockn event that influences production capacity and costs in an economy. Support levelA price level below which it is supposedly difficult for a security or market to fall. Take-up feeA fee paid to an underwriter in connection with an underwritten rights offering or an Trading costscosts of buying and selling marketable securities and borrowing. Trading costs include Transactions costsThe time, effort, and money necessary, including such things as commission fees and the Upstairs marketA network of trading desks for the major brokerage firms and institutional investors that UptickA term used to describe a transaction that took place at a higher price than the preceding transaction Uptick tradeRelated:Tick-test rules Visible supplyNew muni bond issues scheduled to come to market within the next 30 days. Weighted average couponThe weighted average of the gross interest rate of the mortgages underlying the Zero coupon bondSuch a debt security pays an investor no interest. It is sold at a discount to its face price Zero uptickRelated: tick-test rules. Zero-coupon bondA bond in which no periodic coupon is paid over the life of the contract. Instead, both the Avoidable costscosts that are identifiable with and able to be influenced by decisions made at the business Direct costscosts that are readily traceable to particular products or services. Fixed costscosts that do not change with increases or decreases in the volume of goods or services Indirect costscosts that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead. Mark-upThe amount added to a lower figure to reach a higher figure, expressed as a percentage of the Period costsThe costs that relate to a period of time. Semi-fixed costs costs that are constant within a defined level of activity but that can increase or decrease when Semi-variable costscosts that have both fixed and variable components. Set-upThe time required to make ready a machine or process for production, e.g. changing equipment Standard costsA 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 Sunk costscosts that have been incurred in the past. Office suppliesThe cost of the supplies used in running an office. capitalization of costsWhen a cost is recorded originally as an increase fixed expenses (costs)Expenses or costs that remain the same in amount, overhead costsOverhead generally refers to indirect, in contrast to direct, Coupon / CouponsThe periodic interest payment(s) made by the issuer of a bond Coupon RateThe rate of interest paid on a debt security. Generally stated on an Zero-coupon BondA security that makes no interest payments; it is sold at a discount equivalent units of production (EUP)an approximation of the number of whole units of output that could have been 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 setup costthe direct or indirect cost of getting equipment supply-chain managementthe cooperative strategic planning, units started and completedthe difference between the number of units completed for the period and the units in beginning inventory; it can also be computed as the number of units started during the period minus the units in ending inventory CouponDetachable certificate attached to a bond that shows the amount of Coupon datesThe dates when the coupons are paid. Typically a bond pays Coupon rateThe nominal interest rate that the issuer promises to pay the Zero curve, zero-coupon yield curveA yield curve for zero-coupon bonds; Zero-coupon bond, or ZeroA bond that, instead of carrying a coupon, is sold MarkupAn increase in the cost of a product to arrive at its selling price. Setup costThe cluster of one-time costs incurred whenever a production batch is run, bankruptcyThe reorganization or liquidation of a firm that cannot pay its debts. carrying costscosts of maintaining current assets, including opportunity cost of capital. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |