Tuesday, September 19, 2017

Important Financial Term For Interview

Stock 
A stock is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
Weighted Average Cost Of Capital - WACC
Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted .
Money Market
The money market is where financial instruments with high liquidity and very short maturities are traded. It is used by participants as a means for borrowing and lending in the short term,with maturities that usually range from overnight to just under a year. Among the most common money market instruments are eurodollar deposits, negotiable certificates of deposit (CDs), bankers acceptances , Treasury bills , commercial paper, municipal notes , federal funds and repurchase agreements (repos).
Capital Markets
Capital markets are markets for buying and selling equity and debt instruments. Capital markets channel savings and investment between suppliers of capital such as retail investors and institutional investors , and users of capital like businesses, government and individuals. Capital markets are vital to the functioning of an economy, since capital is a critical component for generating economic output. Capital markets include primary markets , where new stock and bond issues are sold to investors, and secondary markets , which trade existing securities.
Common Stock
Common stock is a security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure; in the event of liquidation , common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debtholders are paid in full.
Preffered  Stock
The parts of corporate securities are called as preference shares. It is the shares, whichhave preferential right to get dividend and get back the initial investment at the time of winding up of the company.
Deferred Shares
 Deferred shares also called as founder shares because these shares were normally issued to founders. The shareholders have a preferential right to get dividend before the preference shares and equity shares.These shares were issued to the founder at small denomination to control over the management by the virtue of their voting rights.
No Per Shares
When the shares are having no face value, it is said to be no par shares. The value of shares can be measured by dividing the real net worth of the company with the total number of shares.
Debentures
A Debenture is a document issued by the company. It is a certificate issued by the company under its seal acknowledging a debt.debenture includes debenture stock, bonds and any other securities of a company whether constituting a charge of the assets of the company or not.
Capital
The term capital refers to the total investment of the company in terms of money, and assets.
It is also called as total wealth of the company. When the company is going to invest large
amount of finance into the business, it is called as capital

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