Corporate Finance & Investment
The terms behind raising, valuing, and deploying capital: equity, debt, investment, and the mechanics of corporate finance.
47 terms
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01
Equity & Ownership
Additional Paid in Capital
A component of shareholders' equity representing the amount investors have invested in excess of the par value of issued stock.
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02
Valuation & Returns
Analyst
A financial professional who evaluates investment opportunities, business performance, and market conditions to provide insights and recommendations.
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03
Investment & Planning
Annuity
A financial product or mathematical concept representing a series of equal payments made at regular intervals over a specified period.
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04
Markets & Transactions
Bankruptcy
A legal process where individuals or organizations seek relief from debts they cannot repay, either through reorganization (Chapter 11) or liquidation (Chapter 7).
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05
Debt & Credit
Bond
A debt instrument representing a loan made by investors to an issuer, typically a corporation or government entity, with specified terms for repayment of principal and periodic interest payments.
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06
Equity & Ownership
Capital
The financial resources available for use in business operations, including both monetary assets and physical assets that can generate value.
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07
Valuation & Returns
Capital Gain
The profit realized from selling a capital asset (such as stocks, bonds, real estate, or equipment) for more than its purchase price or basis.
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08
Equity & Ownership
Capital Stock
The ownership shares issued by a corporation, representing claims on the company's assets and earnings.
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09
Investment & Planning
Certified Financial Planner (CFP)
A professional designation earned by individuals who demonstrate expertise in comprehensive financial planning through education, examination, experience, and ethical requirements.
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10
Equity & Ownership
Common Stock
The basic form of corporate ownership representing fundamental equity interest in a company.
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11
Debt & Credit
Compensatory Balance
A minimum balance that a business must maintain in its bank account as an informal requirement for receiving certain banking services or maintaining a credit line.
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12
Debt & Credit
Credit Agreement
A formal contract between a lender and borrower establishing the terms and conditions of a loan or line of credit.
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13
Valuation & Returns
Current Value
The present worth of an asset or liability based on current market conditions or replacement cost, rather than historical cost.
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14
Debt & Credit
Default
The failure to meet obligatory financial commitments such as loan payments, bond interest payments, or other contractual obligations.
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15
Markets & Transactions
Derivatives
Financial instruments whose value derives from the performance of an underlying asset, index, or entity.
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16
Valuation & Returns
Discount
A reduction from a standard price, nominal value, or face value.
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17
Equity & Ownership
Distributions
Payments or allocations of assets, typically cash or stock, to owners or beneficiaries of an organization.
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18
Equity & Ownership
Equity
The residual interest in an entity's assets after deducting liabilities, representing owners' stake in the business.
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19
Markets & Transactions
Escrow
A legal arrangement where a third party holds and regulates assets or funds for transacting parties until specified conditions are met.
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20
Valuation & Returns
Fair Market Value
The price an asset would sell for in an open market between willing parties who are knowledgeable and acting in their own best interests.
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21
Debt & Credit
Foreclosure
The legal process by which a lender takes possession of property used as collateral when a borrower defaults on loan payments.
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22
Debt & Credit
Guaranty
A promise to assume responsibility for another party's debt or performance obligations if they fail to meet their commitments.
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23
Debt & Credit
Insolvent
A financial condition where an entity cannot meet its obligations as they come due or has liabilities exceeding assets.
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24
Valuation & Returns
Interest
The cost of borrowing money or the return earned on lending/investing money, typically expressed as a percentage of the principal amount.
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25
Investment & Planning
Investment
The commitment of resources (typically money, time, or assets) with the expectation of generating future benefits or returns.
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26
Debt & Credit
Junk Bonds
High-yield, high-risk debt instruments issued by companies with lower credit ratings.
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27
Debt & Credit
Letter of Credit
A bank's written commitment to guarantee payment on behalf of a client, typically used in international trade or large transactions.
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28
Markets & Transactions
Liquidation
The process of converting assets to cash and settling liabilities, typically when closing a business or part of a business.
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29
Markets & Transactions
Merger
The combination of two or more organizations into a single entity, typically through the absorption of one company by another or the creation of a new entity.
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30
Debt & Credit
Mortgage
A loan secured by real property, typically used to finance the purchase of real estate or leverage existing property value.
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31
Equity & Ownership
Option
A contract giving the holder the right, but not the obligation, to buy (call option) or sell (put option) an asset at a specified price within a set time period.
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32
Valuation & Returns
Premium
An amount paid above face value, standard price, or market value.
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33
Valuation & Returns
Present Value
The current worth of future cash flows discounted at an appropriate rate, reflecting the time value of money.
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34
Valuation & Returns
Pro Rata
A proportional allocation or distribution based on relative shares or time periods.
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35
Debt & Credit
Promissory Note
A written promise to pay a specified sum of money under defined terms, including interest rate, payment schedule, and maturity date.
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36
Markets & Transactions
Prospectus
A formal document providing detailed information about an investment offering, typically used in securities offerings or mutual fund sales.
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37
Markets & Transactions
Proxy
A written authorization allowing one party to act on behalf of another, typically used in corporate governance for shareholder voting.
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38
Debt & Credit
Refinancing Agreement
A formal contract that replaces an existing debt obligation with a new one under different terms and conditions.
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39
Valuation & Returns
Return on Investment (ROI)
A performance measure comparing the gain from an investment relative to its cost, typically expressed as a percentage.
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40
Markets & Transactions
Security
A financial instrument representing ownership (stocks) or creditor (bonds) interests, tradeable in financial markets.
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41
Markets & Transactions
Short Sale
A transaction where an investor borrows and sells a security expecting its price to decline, planning to repurchase it later at a lower price.
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42
Valuation & Returns
Spread
The difference between two related financial measures, such as buying and selling prices, or borrowing and lending rates.
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43
Equity & Ownership
Stock Option
A contractual right to purchase or sell stock at a predetermined price within a specific time period.
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44
Valuation & Returns
Valuation
The process of determining the current worth of an asset, liability, or entire business.
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45
Investment & Planning
Venture Capital
Investment funding provided to early-stage companies with high growth potential.
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46
Equity & Ownership
Warrant
Financial instruments giving holders the right to purchase company shares at a specified price within a set time period.
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47
Equity & Ownership
Warrant Program
A systematic approach to issuing and managing warrant instruments, typically as part of corporate financing or compensation strategies.