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Debt Overhang
Debt overhang is the condition of an organization (for example, a business, government, or family) that has existing debt so great that it cannot easily borrow more money, even when that new borrowing is actually a good investment that would more than pay for itself. This problem emerges, for example, if a company has a new investment project with positive net present value (NPV), but cannot capture the investment opportunity due to an existing debt position, i.e., the face value of the existing debt is bigger than the expected payoff. Hence, the equity holders will be reluctant to invest in such a project because most of the benefits will be reaped by the debt holders. In addition, debt holders will not finance the firm if the company cannot convince the debt holders that the project will not fail. The situation emerges if existing debtholders of a company can be expected to lay claim to (part of) the profits of the new project, and this renders the NPV of the project (when under ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Organization
An organization or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -ization), see spelling differences) is an legal entity, entity—such as a company, or corporation or an institution (formal organization), or an Voluntary association, association—comprising one or more person, people and having a particular purpose. Organizations may also operate secretly or illegally in the case of secret society , secret societies, criminal organizations, and resistance movements. And in some cases may have obstacles from other organizations (e.g.: Southern Christian Leadership Conference, MLK's organization). What makes an organization recognized by the government is either filling out Incorporation (business), incorporation or recognition in the form of either societal pressure (e.g.: Advocacy group), causing concerns (e.g.: Resistance movement) or being considered the spokesperson o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Common Stock
Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Commonwealth realms. This type of share gives the stockholder the right to share in the profits of the company, and to vote on matters of corporate policy and the composition of the members of the board of directors. The owners of common stock do not directly own any assets of the company; instead each stockholder owns a fractional interest in the company, which in turn owns the assets. As owners of a company, common stockholders are eligible to receive dividends from its recent or past earnings, proceeds from a sale of the company, and distributions of residual (left-over) money if it is liquidated. In general, common stockholders have lowest priority to receive payouts from the company. They may not receive dividends until the company ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Default Trap
Default may refer to: Law * Default (law), the failure to do something required by law ** Default (finance), failure to satisfy the terms of a loan obligation or failure to pay back a loan ** Default judgment, a binding judgment in favor of either party based on some failure to take action by the other party ** Default rule, a rule of law that can be overridden by a contract, trust, will, or other legally effective agreement Science, technology * Default (computer science), a preset setting or value that will be used if no choice is done during program use or installation and setup * Default password, allows the device to be accessed during its initial setup, or after resetting to factory defaults * defaults (software), a command line utility for plist (preference) files for macOS and GNUstep Music * "Default" (Atoms for Peace song), 2012 * Default (band), a Canadian post-grunge and alternative rock band * "Default" (Django Django song), 2012 * ''By Default'', a 2016 albu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Default Logic
Default logic is a non-monotonic logic proposed by Raymond Reiter to formalize reasoning with default assumptions. Default logic can express facts like “by default, something is true”; by contrast, standard logic can only express that something is true or that something is false. This is a problem because reasoning often involves facts that are true in the majority of cases but not always. A classical example is: “birds typically fly”. This rule can be expressed in standard logic either by “all birds fly”, which is inconsistent with the fact that penguins do not fly, or by “all birds that are not penguins and not ostriches and ... fly”, which requires all exceptions to the rule to be specified. Default logic aims at formalizing inference rules like this one without explicitly mentioning all their exceptions. Syntax of default logic A default theory is a pair \langle W, D \rangle. is a set of logical formulas, called ''the background theory'', that formalize the f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Debt-trap Diplomacy
Debt-trap diplomacy is a term to describe an international financial relationship where a creditor country or institution extends debt to a borrowing nation partially, or solely, to increase the lender's political leverage. The creditor country is said to extend excessive credit to a debtor country with the intention of extracting economic or political concessions when the debtor country becomes unable to meet its repayment obligations. The conditions of the loans are often not publicized. The borrowed money commonly pays for contractors and materials sourced from the creditor country. A neologism, the term was first coined by Indian academic Brahma Chellaney in 2017 to contend that the Chinese government lends and then leverages the debt burden of smaller countries for geopolitical ends. The term "debt-trap diplomacy" has entered the official lexicon of the United States, with three successive administrations employing the term in public diplomacy. Many academics, professionals ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Credit Creation
Money creation, or money issuance, is the process by which the money supply of a country, or an economic or monetary region,Such as the Eurozone or ECCAS is increased. In most modern economies, money is created by both central banks and commercial banks. Money issued by central banks is a liability, typically called reserve deposits, and is only available for use by central bank account holders, which are generally large commercial banks and foreign central banks. Central banks can increase the quantity of reserve deposits directly, by making loans to account holders, purchasing assets from account holders, or by recording an asset, such as a deferred asset, and directly increasing liabilities. However, the majority of the money supply used by the public for conducting transactions is created by the commercial banking system in the form of commercial bank deposits. Bank loans issued by commercial banks expand the quantity of bank deposits. Money creation occurs when the am ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Corporate Finance
Corporate finance is an area of finance that deals with the sources of funding, and the capital structure of businesses, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to Shareholder value, maximize or increase valuation (finance), shareholder value.SeCorporate Finance: First Principles Aswath Damodaran, New York University's Stern School of Business Correspondingly, corporate finance comprises two main sub-disciplines. Capital budgeting is concerned with the setting of criteria about which value-adding Project#Corporate finance, projects should receive investment funding, and whether to finance that investment with ownership equity, equity or debt capital. Working capital management is the management of the company's monetary funds that deal with the short-term operating balance of current assets and Current liability, cu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Capital Structure
In corporate finance, capital structure refers to the mix of various forms of external funds, known as capital, used to finance a business. It consists of shareholders' equity, debt (borrowed funds), and preferred stock, and is detailed in the company's balance sheet. The larger the debt component is in relation to the other sources of capital, the greater financial leverage (or gearing, in the United Kingdom) the firm is said to have. Too much debt can increase the risk of the company and reduce its financial flexibility, which at some point creates concern among investors and results in a greater cost of capital. Company management is responsible for establishing a capital structure for the corporation that makes optimal use of financial leverage and holds the cost of capital as low as possible. Capital structure is an important issue in setting rates charged to customers by regulated utilities in the United States. The utility company has the right to choose any capital ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Paper Valuation
Paper Valuation is the value of privately held shares that is not directly tradeable at an exchange. This notional value, though, is as yet untested on real buyers. The opposite of paper value is exchangeable value, and is the value that is directly monetizable as long as there is a willing buyer and a willing seller. Thus, if the aside exchange was made as an "Exchange Valuation" this new company valuation would be tradeable directly on the stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for .... One problem with Paper Valuation is that it is not that easy to monetize in a short time period. This valuation concept is a cornerstone in the stock exchange world. Value exchange is paramount to its existence. See also * Pre-money valuation * Post-money valuation {{financ ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Credit Creation
Money creation, or money issuance, is the process by which the money supply of a country, or an economic or monetary region,Such as the Eurozone or ECCAS is increased. In most modern economies, money is created by both central banks and commercial banks. Money issued by central banks is a liability, typically called reserve deposits, and is only available for use by central bank account holders, which are generally large commercial banks and foreign central banks. Central banks can increase the quantity of reserve deposits directly, by making loans to account holders, purchasing assets from account holders, or by recording an asset, such as a deferred asset, and directly increasing liabilities. However, the majority of the money supply used by the public for conducting transactions is created by the commercial banking system in the form of commercial bank deposits. Bank loans issued by commercial banks expand the quantity of bank deposits. Money creation occurs when the am ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Unsecured Debt
In finance, unsecured debt refers to any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment. Unsecured debts are sometimes called signature debt or personal loans. These differ from secured debt such as a mortgage, which is backed by a piece of real estate. In the event of the bankruptcy of the borrower, the unsecured creditors have a general claim on the assets of the borrower after the specific pledged assets have been assigned to the secured creditors. The unsecured creditors usually realize a smaller proportion of their claims than the secured creditors. In some legal systems, unsecured creditors who are ''also'' indebted to the insolvent debtor are able (and, in some jurisdictions, required) to set off the debts, so actually putting the unsecured creditor with a matured liability to the debtor in a pre-p ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Toxic Assets
A toxic asset is a financial asset that has fallen in value significantly and for which there is no longer a functioning market. Such assets cannot be sold at a price satisfactory to the holder. Because assets are offset against liabilities and frequently leveraged, this decline in price may be quite dangerous to the holder. The term became common during the 2008 financial crisis, in which toxic assets played a major role. When the market for toxic assets ceases to function, it is described as "frozen". Markets for some toxic assets froze in 2007, and the problem grew much worse in the second half of 2008. Several factors contributed to the freezing of toxic asset markets. The value of the assets was very sensitive to economic conditions, and increased uncertainty in these conditions made it difficult to estimate the value of the assets. Banks and other major financial institutions were unwilling to sell the assets at significantly reduced prices, since lower prices would force them ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
