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 20 names in this directory beginning with the letter H.
Harassment hypothesis
Ellert’s theory that Federal Trade Commission antitrust complaints are brought against firms with abnormally good stock price performance, at the instigation of the firms’ competitors who are threatened by their superior performance.
Harmless warrant
is warrant that allows the user to purchase a bond only by surrendering an existing bond with similar terms.
Hart-Scott-Rodino Antitrust Improvements Act of 1976
Expands power of Department of Justice in antitrust investigations; provides for waiting period (15 days for tender offers, 30 days for mergers) following submission of information to Department of Justice and Federal Trade Commission before transaction can be completed, expands power of state Attorney’s General to institute triple damage antitrust lawsuits on behalf of their citizens.
Heaven-and-hell bonds
Dual-currency bonds whose principal repayment is in a currency different from the interest payments. The size of the principal repayment is partially increased if the value of the currency falls and vice-versa.
Hedge ratio (Delta, option delta)
the number of shares to buy for each option sold in order to create a safe position. More generally, the number of units of an asset that should be bought to hedge one unit of a liability.
Hedging
buying one security and selling another in order to reduce risk. A perfect hedge produces a riskless portfolio.
Hell-or-high-water clause
is a clause in a lease agreement that obliges lesser to make payments regardless of what happens to the lesser or the equipment.
Herfindahl-Hirschman Index (HHI)
the measure of concentration under the 1982 Merger Guidelines, defined as the sum of the squares of the market shares of all the firms in the industry.
Hidden equity
undervalued assets whose market value exceeds their depreciated book value, but is not reflected in stock price.
Hierarchy of needs
Psychologist Abraham Maslow’s theory that basic human needs exist in an ascending order of importance and that once a lower level need is satisfied, actions appealing to it cease to motivate.
High-yield bonds
are junk bonds which are below investment grade when issued i.e. rated below BBB (S&P’s) or below Baa3 (Moody’s).
Holding company
an organization whose primary function is to hold the stock of other corporations, but which has no operating units of its own. Like multidivisional organization which has profit centers and a single central headquarters. However, the segments owned by the holding company are separate legal entities which in practice are controlled by the holding company.
Holdup
whenever a resource is dependent on (specialized to) the rest of the firm, there may be a temptation for others to try to expropriate the quasi-rent of the dependent resource by withholding their complementary resources; this is holdup. However, each resource in the team (firm) may be dependent on all the others, and thus all are vulnerable to expropriation.
Homeostasis, dynamic
the characteristic of a system whereby it is constantly in motion, with a tendency to seek equilibrium at various changing levels.
Horizontal spread-options
the simultaneous purchase and sale of two options that differ only in their exercise date.
Hubris hypothesis (Winner’s course)
Roll’s theory that acquiring firm managers commit errors of over optimism in evaluating merger opportunities (due to excessive pride, animal spirits), and end up paying too high a price for acquisitions.
Human asset accounting
programs attempting to measure the value, and its changes, of investment in human assets of an enterprise.
Hygiene factors of motivation
Psychologist Herzberg’s theory that certain human needs motivate and others merely cause dissatisfaction if they are not met; these such factors in a work situation are the salary, company policy and administration, quality of supervision, working conditions, interpersonal relations, status and job security.
