Professional Documents
Culture Documents
A tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers. They are one of several tools available to shape trade policy
Secondly, the specific details concerning settlement and delivery are quite distinct. For forward contracts, settlement of the contract occurs at the end of the contract. Futures contracts are marked-tomarket daily, which means that daily changes are settled day by day until the end of the contract. Furthermore, settlement for futures contracts can occur over a range of dates. Forward contracts, on the other hand, only possess one settlement date. Lastly, because futures contracts are quite frequently employed by speculators, who bet on the direction in which an asset's price will move, they are usually closed out prior to maturity and delivery usually never happens. On the other hand, forward contracts are mostly used by hedgers that want to eliminate the volatility of an asset's price, and delivery of the asset or cash settlement will usually take place.
Definition of 'Swap'
Traditionally, the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. Recently, swaps have grown to include currency swaps and interest rate swaps.
The general idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk. The time value of money is represented by the risk-free (rf) rate in the formula and compensates the investors for placing money in any investment over a period of time. The other half of the formula represents risk and calculates the amount of compensation the investor needs for taking on additional risk. This is calculated by taking a risk measure (beta) that compares the returns of the asset to the market over a period of time and to the market premium (Rm-rf).
the portfolio the APT calculations were based on, the arbitrageur is in a position to make a theoretically risk-free profit.
expenses associated with the IPO and is typically short-term in nature. Once the IPO is complete, the cash raised from the offering will immediately payoff the loan liability.
Definition of 'Consortium'
A group made up of two or more individuals, companies or governments that work together toward achieving a chosen objective. Each entity within the consortium is only responsible to the group in respect to the obligations that are set out in the consortium's contract. Therefore, every entity that is under the consortium remains independent in his or her normal business operations and has no say over another member's operations that are not related to the consortium.
Growth-share matrix
The growth-share matrix (aka the product portfolio,[1] BCG-matrix, Boston matrix, Boston Consulting Group analysis, portfolio diagram) is a chart that had been created by Bruce D. Henderson for the Boston Consulting Group in 1970 to help corporations with analyzing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis.[2] Analysis of market performance by firms using its principles has called its usefulness into question, and it has been removed from some major marketing textbooks.[3]
What It Is:
A leveraged buyout (LBO) is a method of acquiring a company with money that is nearly all borrowed.
How It Works/Example:
The basic idea behind an LBO is that the acquirer purchases the target with a loan collateralized by the target's own assets. In hostile takeover situations, the use of the target's assets to secure credit for the acquirer is one reason the LBO has a predatory reputation.
Why It Matters:
The purpose of an LBO is to make a large acquisition without having to commit a lot of capital. The acquirers also want to maximize shareholder value by attempting to create a stronger and more profitable combined entity. The buyer needs to ensure that the expected synergies materialize in order to realize financial returns. The risks associated with a LBO deal are why share prices often fall when a company announces news of a LBO. However, such a price fall can be a buying opportunity if investors think the company will be able to pay down the debt, which increases the value of the shares. The world's most famous LBO is the approximately $25 billion takeover of RJR Nabisco by private equity firm Kohlberg Kravis Roberts in 1989. The deal was so famous (and so brazen) that it was immortalized by the book and movie Barbarians at the Gate. In those days, many companies used LBOs to purchase undervalued companies only to turn around and sell off the assets (these acquirers were called corporate raiders). Today, however, LBOs are increasingly used as a way to make an average company become a great company.