A comprehensive explanation of Common Stock, its characteristics, associated risks, and benefits in the context of corporate ownership.
Common stock equivalent refers to securities such as preferred stock, convertible bonds, or warrants that can be converted into common stock, potentially diluting the equity of existing common shareholders.
A comprehensive guide to understanding Common Stock Funds, their characteristics, and their role in investment portfolios.
Common Stock Ratio: Understanding the Percentage of Total Capitalization Represented by Common Stock
An in-depth look at the Common Stock Ratio, its significance for creditors and investors, and its impact on financial leverage and safety.
A detailed examination of complex capital structures in finance, including the implications of potential dilution, dual presentation of earnings per share, and comprehensive definitions.
An in-depth exploration of the contract rate, also known as the face interest rate, defining its relevance in financial agreements.
A detailed examination of contrarian investing, its principles, strategies, and how it contrasts with mainstream investment approaches.
A comprehensive explanation of control premium, its implications in business valuation, examples, historical context, comparisons with minority discount, and more.
Conversion Parity is a financial term related to convertible securities and refers to the price at which convertible securities (like bonds or preferred shares) can be converted into common stock.
The dollar value at which convertible bonds, debentures, or preferred stock can be converted into common stock; typically announced when the convertible security is initially issued.
The Conversion Ratio is a critical financial metric determining how many shares of common stock an investor will receive for each convertible bond or preferred share upon conversion.
Convertibles are corporate securities, such as preferred shares or bonds, that can be exchanged for a set number of another form, usually common shares, at a pre-stated price.
An in-depth look at Corporate Bonds, detailing their features, types, historical context, and more.
A `coupon bond` is a bond issued with detachable coupons that must be presented to a paying agent or the issuer for semiannual interest payments. It is a type of bearer bond, meaning whoever presents the coupon is entitled to the interest.
A detailed exploration of a covered option, its mechanisms, benefits, and comparisons with naked options.
A comprehensive overview of Credit Default Swaps (CDS) including their functions, mechanisms, examples, historical context, and implications in financial markets.
Credit Watch is a term used by bond rating agencies to indicate that a company's credit rating is under review and subject to potential change, generally with the implication of a downgrade due to adverse events affecting its income statement or balance sheet.
A comprehensive guide to Cumulative Dividends including their definition, types, examples, historical context, and applicability in finance, particularly associated with Cumulative Preferred Stock.
Cumulative Preferred Stock is a type of preferred stock where unpaid dividends accumulate until they are paid out, taking precedence over common stock dividends.
Currency Futures are contracts in the futures markets that are for delivery in a major currency such as U.S. dollars, Euros, or Japanese yen. Corporations that sell products globally can hedge the risk of adverse exchange rate movements with these futures.
An exploration of Current Market Value, its determinants, calculations, and significance in various industries, such as real estate and investments.
Current yield is a measure of the annual interest income generated by an investment, divided by its current market price. It is particularly applicable to bonds, offering a realistic view of return as opposed to other measures such as the coupon rate or yield to maturity.
Comprehensive Overview of CUSIP: A Standardized Identification System for Securities
A comprehensive guide to Day Trading, its mechanisms, types, strategies, historical context, and modern-day applications.
Comprehensive overview of debt securities, including definitions, types, examples, historical context, applicability, related terms, FAQs and more.
A comprehensive look at the Debt/Equity Ratio, its implications, computations, and its role in finance and investments.
A Deep Discount Bond is a bond sold for a discount of more than about 25% from its face value. Unlike Original Issue Discount bonds, these were issued at par value of $1,000, but market forces led to a significant decline in market value.
An in-depth exploration of defensive securities, including their stability, examples, and role in investment strategies.
A detailed exploration of Deferred Interest Bonds, their features, types, implications, and practical applications.
A detailed explanation of Deferred-Payment Annuities, how they work, their types, benefits, and their usage in financial planning.
Depositary Receipts facilitate global investment by allowing investors to hold shares in foreign companies through domestic financial securities.
An in-depth exploration of Derivative Securities, their types, applications, and impact in financial markets.
A descriptive memorandum serves as an offering circular for property or securities when a full prospectus is not required. It provides essential information to potential investors.
A detailed explanation of a 'DIP' in securities prices, its relevance in trading strategies, and advice for investors.
Comprehensive overview of disclosure in the context of investments, covering requirements by the Securities and Exchange Commission (SEC) and stock exchanges.
A detailed explanation of a discount broker, including its services, comparison with full-service brokers, and relevance in stock markets and real estate.
A comprehensive guide to understand and calculate the discount yield on securities sold at a discount, such as U.S. Treasury bills. Details include the definition, formula, examples, and special considerations.
A comprehensive guide to the Discounted Cash Flow (DCF) technique used to estimate the present value of future cash flows, encompassing NPV and IRR methods, crucial for capital and securities investment analysis.
Disintermediation refers to the process where savings are moved from traditional financial intermediaries such as banks to money market instruments like U.S. Treasury bills and notes.
A detailed exploration of distribution, including its definitions in corporate finance, economics, estate law, mutual funds, and securities trading.
Diversify is the practice of spreading investments across various assets to reduce risk.
The Dividend Payout Ratio is a financial metric that indicates the proportion of earnings a company pays out to its shareholders in the form of cash dividends. This ratio helps investors understand the distribution of corporate profits.
A Dividend Reinvestment Plan (DRP) allows shareholders to reinvest their dividends automatically into additional shares of the company's stock, increasing the taxpayer's basis in the shares and necessitating meticulous record-keeping for tax purposes.
A comprehensive guide on the Dividend Rollover Plan, a trading strategy centering on the timing of stock purchases and sales around ex-dividend dates to collect dividends and aim for small trading profits.
A comprehensive overview of Dividend Yield, which represents the annual percentage of return earned by an investor on a common or preferred stock.
Dollar Cost Averaging (DCA) is an investment strategy that involves consistently investing a fixed dollar amount into mutual funds or securities at regular intervals, regardless of asset price.
Delve into the concept of donated stock, fully paid capital stock of a corporation that is contributed without consideration to the same issuing corporation. Explore definitions, types, examples, and implications.
A comprehensive examination of downside risk, a measure of the potential decline in investment value considering various market factors.
Earnings reports provide critical insights into a company's financial performance, detailing revenue, expenses, and profitability. Typically issued monthly or quarterly, these reports are crucial for investors, management, and stakeholders to understand company health and make informed decisions.
A comprehensive guide to Education IRAs, also known as Coverdell Education Savings Accounts, including structure, benefits, and usage.
An in-depth look at the Effective Interest Rate (Yield) on debt instruments, its calculation, significance, and comparisons with other yield metrics.
An efficient portfolio of investments has a maximum expected return for a given level of risk or a minimum level of risk for a given expected return.
Employee Stock Options are opportunities for employees to purchase stock in the company they work for, often at a discount from market value. Explore the two main tax categories: statutory (incentive stock options) and nonstatutory.
An Employee Stock Ownership Plan (ESOP) is a program encouraging employees to purchase stock in their company, allowing them to participate in management and gain ownership. Companies can benefit from tax deductions for ESOP dividends and stock acquisition loan repayments.
An Equipment Trust Bond is a type of secured bond issued primarily by transportation companies to finance the purchase of new equipment, with bondholders having a claim to the equipment in case of default.
Equity Financing involves raising money by selling part of the ownership, such as stock in a corporation, in contrast with debt financing.
An in-depth look at the concept of an equity kicker, a term used in finance to signify a form of compensation provided to lenders, which offers them potential upside in the form of equity in a company.
The Equity Yield Rate is the rate of return on the equity portion of an investment, considering periodic cash flow and resale proceeds. This metric takes into account the timing and amounts of cash flow after annual debt service, but does not include income taxes.
An analysis of the Equivalent Taxable Yield, comparing the taxable yield on a corporate bond and the tax-free yield on a municipal bond, with a focus on implications for investors in different tax brackets.
An in-depth exploration of Eurobonds, bonds denominated in foreign currencies and sold to investors outside their native countries.
Detailed Explanation of Eurocommercial Paper, Including Definition, Types, Historical Context, Applicability, Comparisons, and Frequently Asked Questions.
A comprehensive overview of Eurodollar Bonds, international bonds issued in U.S. dollars but outside the United States, focusing on their structure, benefits, historical context, and how they function in the financial markets.
A comprehensive guide to the ex-dividend date, its importance, and how it impacts investors and stock prices.
An EX-LEGAL municipal bond is a bond that does not have the legal opinion of a bond law firm printed on it. Learn about its implications and considerations.
Exchange-Traded Funds (ETFs) are securities representing mutual funds that are traded like stocks on exchanges. They offer several advantages, including liquidity and real-time pricing.
Exchange-Traded Notes (ETNs) are senior unsecured debt instruments that track the performance of a specific index, offering a unique investment option with both returns and risks tied to the creditworthiness of the issuer.
Exercise refers to the act of utilizing a right available in a contract. For example, in options, it involves buying the property, and in convertible securities, it means making the exchange.
The exercise price, also known as the strike price, is the fixed price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying stock, or the price at which a convertible security can be redeemed for shares of stock.
An exit fee, commonly known as a back-end load, is a fee charged to investors when they withdraw funds from an investment fund.
A comprehensive guide to Expected Return, its calculation, importance in finance, and relationship with Mean Return.
An additional dividend paid to shareholders in addition to the regular dividend, often after a particularly profitable year to reward shareholders and encourage loyalty.
Comprehensive explanation of extraordinary dividends, including their characteristics, implications, types, and examples.
The face amount of a bond, also known as its face value, is the nominal or par value of the bond, representing the amount paid back to the bondholder at maturity.
Comprehensive explanation of face value, its significance in financial instruments such as bonds and checks, and comparison with market value.
A Fairness Opinion is a professional judgment given by appraisers or investment bankers on the fairness of the price in mergers, takeovers, or leveraged buyouts.
A detailed examination of the concept of a family of funds, highlighting various fund types, their objectives, and the benefits of investing in them.
Federal Agency Security is a debt instrument issued by an agency of the federal government, such as the Federal National Mortgage Association or the Federal Farm Credit Bank. Though not obligations of the U.S. Treasury, these securities are sponsored by the government and have high credit ratings.
Feeder Fund is an investment vehicle similar to a Fund of Funds but differs in that it channels investments to a master fund responsible for managing the underlying investments.
A comprehensive overview of financial futures contracts, their characteristics, types, examples, and their relationship with interest rates.
Financial leverage involves using borrowed funds to increase the potential return on investment. This article explains types of financial leverage, examples, historical context, its applicability, and more.
An in-depth look at the financial pyramid, a risk structure strategy used by investors to diversify and manage risk across various investment vehicles.
A comprehensive guide to financial risk, which encompasses the increased potential for volatility in investment performance caused by the use of borrowed money, commonly known as leverage.
Firm Commitment in Securities Underwriting: Detailed Explanation, Examples, and Key Considerations
First Call is a Thomson Reuters service that provides consensus estimates and recommendations from financial analysts.
A detailed exploration of FIT Investments, covering various types, historical context, and applicability in modern financial markets.
A FIT situation occurs when the characteristics of a product, such as an investment, align seamlessly with the specific needs and preferences of a buyer, ensuring an optimal match and enhancing the likelihood of satisfaction and success.
A comprehensive overview of fixed-income investments, including government, corporate, and municipal bonds, and preferred stock, focusing on their fixed rate of return.
Flight to Quality refers to the movement of capital from higher-risk investments to safer assets, such as U.S. Treasury bills, during periods of market uncertainty.
Comprehensive explanation of 'Floating an Issue', covering underwriting, issuance process, historical context, and related terminology in finance.
An in-depth guide to Floating Securities, covering its various definitions, implications in finance, and key considerations for investors and traders.
Floating supply refers to the total dollar amount of municipal bonds in the hands of speculators and dealers that is for sale at any particular time, and the number of shares of a stock available for purchase.
Flotation cost refers to the expenses incurred by a company when issuing new stocks or bonds, including underwriting, legal, and registration fees.
An in-depth look into Foreign Direct Investment (FDI), including its types, significance, historical context, examples, and impact on the economy.
An in-depth look at the concept of forfeit penalty, particularly within the context of investment penalty, including definitions, examples, and applications in finance.
Formula investing is an investment technique based on a predetermined timing or asset allocation model that eliminates emotional decisions, ensuring structured and disciplined investing.
The Forward P/E ratio is a financial metric that measures a company's current share price relative to its expected earnings per share (EPS) over the next 12 months. Often used for valuation comparison among companies, this forward-looking measure offers insights into the growth expectations of a business.
Forward Pricing is a method used by open-end investment companies where the share price is determined by the Net Asset Value (NAV) of outstanding shares. It ensures that all incoming buy and sell orders are based on the next net asset valuation of fund shares.
Forward-Looking Statements in financial communications provide predictions based on management's expectations, estimates, projections, and assumptions. These statements adhere to safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include disclaimers that actual future results may differ materially.
A fractional share represents a unit of stock that is less than one full share. It occurs as a result of stock dividends, stock splits, or through direct fractional share purchasing programs.
A front-end load is a sales charge applied at the time of purchase of an investment, as opposed to a back-end load which is a fee incurred upon withdrawal.
