The role of this glossary is to present brief definitions of most of the key concepts in corporate finance and management (in total 900 names-definitions) with aim the reader to be able to understand and become familiar with the terminology in the analyses that will present in the category Corporate & Business.
Additionally, we hope that the reader by acquiring intimacy with the specific terminology, he will also love the science of finance and management, giving to it a significant part of his personal time.
In the following glossary we tried to include the most well-known definitions and terms in the field of Corporate Finance & Management. If you still find that a term or definition is missing and you know that it can be included in this glossary, please do not hesitate to contact us via the contact form of our web-site (Contact Us) and the Liberal Globe will edit it and will include it.
Glossary Corporate Finance & Management
There are currently 40 names in this directory beginning with the letter B.
Back-end rights plan
is called a poison pill takeover defense in which target shareholders are issued a rights dividend exercisable if an acquirer obtains over a triggering amount of target stock. Shareholders may exchange each right-and-share-of-stock held for senior securities or cash equal in value to back-end price set by the target board. This back-end price is set higher than the market price and becomes a minimum takeover price below which no takeover can succeed.
Back-end value
is called the amount paid to remaining shareholders in the second stage of a two-tier or partial tender offer.
Banker’s acceptance (BA)
is the written demand that has been accepted by a bank to pay given sum at a future date (trade acceptance).
Basis risk
is called the residual risk that results when the two sides of a hedge do not move exactly together.
Bear-hug
is named a takeover strategy in which the acquirer, without previous warning, mails the directors of the target a letter announcing the acquisition proposal and demanding a quick decision.
Bearer security
is the security for which primary evidence of ownership is possession of the certificate (i.e. registered security).
Best-efforts underwriting
is called the situation in which the underwriters do not commit themselves to selling a security issue but promise only to use best efforts.
Beta
in the context of the capital asset pricing model (CAPM) is the systematic risk of the asset; the variability of the asset’s return in relation to the return on the market.
Blended price
is called the weighted average price in a two-tier tender offer. The front-end price is weighted by the percent of shares purchased in the first step of the transaction, and the lower, back-end price is weighted by the percent of shares purchased to complete the transaction.
Board of directors
is called the committee which has the power to exercise authority and make decisions. Normally it stands at the top of a corporation and is charged by law with the responsibility of “managing” the corporation.
Board-out clause
in the context of the most supermajority antitakeover amendments, is named that provision which gives the board of directors the power to decide when and if the supermajority provision will be in effect.
Bonus (borrowers’ options for notes and underwritten standby)
is named that borrowing facility which allows the firm to issue either euro notes or US domestic debt. It is also called global note facility.
Book runner
is named the managing underwriter for a new issue. The book runner maintains the book of securities sold.
Bounded rationality
is called rational actions limited because of lack of information, lack of time, or ability to analyze alternatives in the light of a goal sought, unclear goals, or the human tendency not to take risks in deciding, to “play it safe”.
Bracket
is named a term signifying the extent of an underwriter’s commitment in a new issue i.e. major bracket, minor bracket.
Brainstorming
is called the approach to improve problem discovery and solving by encouraging unfettered suggestions and ideas, usually from a group of individuals.
Brand-name capital
is the firm’s reputation; the result of non-salvageable investment which provides customers with an implicit guarantee of product quality for which they are willing to pay a premium.
Break-even point analysis
is called the charting and analyzing relationships usually between sales and expenses, to determine at what size or volume point an operation breaks even between a loss and a profit; it can be used in any problem area where marginal effects can be pinpointed.
Bridging loan
is named the short-term loan with aim to provide temporary financing until more permanent financing is arranged.
Budget summary
is called a master summary of operating and capital budgets, usually with a prediction income statement and balance sheet.
Bull-bear bonds
are those bonds whose principal repayment is linked to the price of another security. The bonds are issued in two tranches: in the first the repayment increases with the price of the other security; in the second the repayment decreases with the price of the other security.
Bullet payment
is named the single final payment i.e. of a loan (in contrast to payments in installments).
Business judgement rule
is called a legal doctrine which holds that the board of directors is acting in the best interests of shareholders unless it can be proven by a preponderance of the evidence that the board is acting in its own interest or is in branch of its judiciary duty.
Bust-up takeover
an acquisition followed by the divesture of some or all the operating units of the acquired firm which are presumably worth more in pieces than as a going concern.
