Corporate finance Test and Flashcards

Management buyout

A management buyout (MBO) is a form of acquisition where a company's existing managers acquire a large part or all of the company from either the parent company or from the private owners.

Investor relations

Investor Relations (IR) is a strategic management responsibility that is capable of integrating finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company's securities achieving fair valuation.

Initial public offering

Initial public offering (IPO) or stock market launch is a type of public offering in which shares of a company usually are sold to institutional investors that in turn, sell to the general public, on a securities exchange, for the first time.

Internal rate of return

The internal rate of return (IRR) or economic rate of return (ERR) is a method of calculating rate of return.

Treasury stock

A treasury stock or reacquired stock is stock which is also bought back by the issuing company, reducing the amount of outstanding stock on the open market ("open market" including insiders' holdings).

Warrant (finance)

In finance, a warrant is a security that entitles the holder to buy the underlying stock of the issuing company at a fixed price called exercise price until the expiry date.

Employee stock option

An employee stock option (ESO) is commonly viewed as a complex call option on the common stock of a company, granted by the company to an employee as part of the employee's remuneration package.

Stock swap

A stock swap is a strategy used during a merger or acquisition of a company.

Takeover

In business, a takeover is the purchase of one company (the target) by another (the acquirer, or bidder).

Fraudulent conveyance

A fraudulent conveyance, or fraudulent transfer, is an attempt to avoid debt by transferring money to another person or company.

Commercial paper

Commercial paper, in the global financial market, is an unsecured promissory note with a fixed maturity of no more than 270 days.

Shareholder value

Shareholder value is a business term, sometimes phrased as shareholder value maximization or as the shareholder value model, which implies that the ultimate measure of a company's success is the extent to which it enriches shareholders.

Reverse factoring

Unlike traditional factoring, where a supplier wants to finance his receivables, reverse factoring (or supply chain financing) is a financing solution initiated by the ordering party in order to help his suppliers to finance their receivables more easily and at a lower interest rate than what they would normally be offered.

Administration (law)

As a legal concept, administrative receivership is a procedure under the insolvency laws of a number of common law jurisdictions.

Whitemail

Whitemail, coined as an opposite to blackmail, has several meanings.

Asset-based lending

Asset-based lending is any kind of lending secured by an asset.

Income trust

An income trust is an investment that may hold equities, debt instruments, royalty interests or real properties.

Flashcards: Corporate finance