corporation which, under Subchapter S of the Internal Revenue Code,
elects to be taxed as a proprietorship or a partnership yet retains
limited liability and other benefits of the corporate form of organization.
whereby a firm sells land, buildings, or equipment and simultaneously
leases the property back for a specified period under specific terms.
of a firm's unit and dollar sales for some future period; it is generally
based on recent sales trends plus forecasts of the economic prospects
for the nation, region, industry, and so forth.
analysis technique in which "bad" and " good" sets of financial circumstances
are compared with a most likely, or base-case, situation.
used to induce customers to buy early by not requiring payment until
the purchaser's selling season, regardless of when the goods are shipped.
in which "used" stocks are traded after they have been issued by corporations.
in which securities and financial assets are traded among investors
after they have been issued by corporations.
backed by collateral, often inventories or receivables.
Market Line (SML)
on a graph that shows the relationship between risk as measured by beta
and the required rate of return for individual securities.
process of determining the final value of a cash flow or series of cash
flows when interest is added twice a year.
analysis technique in which key variables are changed one at a time
and the resulting changes in the NPV and IRR are observed.
contracts are sold to guard against price declines.
taken by a firm's management which provides clues to investors about
how management views the firm's prospects.
in a bond contract that requires the issuer to retire a portion of the
bond issue each year.
that businesses should be actively concerned with the welfare of society
business owned by one individual.
it involves betting future price movements.
balance that is held to enable the firm to take advantage of any bargain
purchases that might arise.
in which the stock of a subsidiary is given to the parent company's
that are obtained automatically from routine business transactions.
exchange rate for a foreign currency for delivery on (approximately)
the current day.
an investor would face if he or she held only one asset Stand-alone
risk is one part of "total risk," with the other part being risk which
can be eliminated through diversification.
an asset would have if it were a firm's only asset and if investors
owned only one stock. It is measured by the variability of the asset's
measure of the variability of a set of observations.
of Cash Flows
reporting the impact of a firm's operating, investing, and financing
activities on cash flows over an accounting period.
of Retained Earnings
reporting how much of the firm's earnings were retained in the business
rather than paid out in dividends. The figure for retained earnings
that appears here is the sum of the annual retained earnings for each
year of the firm's history.
price that is specified to rise if a warrant is exercised after a designated
paid in the form of additional shares of stock rather than in cash.
in which a firm buys back shares of its own stock, thereby decreasing
share outstanding, increasing EPS, and, often, increasing the stock
taken by a firm to increase the number of share outstanding, such as
doubling the number of share outstanding by giving each stockholder
two new share for each one formerly held.
goal for management decision; considers the risk and timing associated
with expected earnings per share in order to maximize the price of the
firm's common stock.
plan which outlines in broad terms the firm's basic strategy for the
next 5 to 10 years.
of deliberately paying late.
that must be paid for a share of common stock when an option is exercised.
obligation derived from another debt obligation.
having a claim on assets only after the senior debt has been paid off
in the event of liquidation.
outlay that has already been incurred and which cannot be recovered
regardless of whether the project is accepted or rejected.
of the life cycle of a firm in which it grows much faster than the economy
as a whole.
agree to exchange obligations to make specified payment streams.
in which investors and managers have identical information about firms'
in which inflows coincide with outflows, thereby permitting a firm to
hold low transactions balances.
wherein the whole is greater than the sum of its parts; in a synergistic
merger, the postmerger value exceeds the sum of the separate companies'
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