What is a Debt Security? A debt security is any debt that can be bought or sold between parties in the market prior to maturity. Its structure represents a debt owed by an issuer (the government, an organization, or a company) to an investor who acts as a lender. Understanding Debt Securities Debt securities are…
What is a Defensive Stock? A defensive stock is a stock that demonstrates relatively stable performance regardless of the current state of the economy. Defensive stocks are also called non-cyclical stocks, as they are less prone to the economic cycle of expansions and recessions. Defensive stocks will come with a steady dividend payment and a…
The best products only succeed when they reach their customers efficiently. Smart distribution strategy shapes both business operations and market performance, giving you the tools to drive company growth. Whether you’re analyzing operations, managing teams, or building business knowledge, your expertise in distribution channel strategy directly impacts market success. At CFI, we teach you how…
What is EBIT/EV Multiple? EBIT/EV Multiple is a financial ratio that is used for measuring the earnings yield of a firm. Investors and market analysts can use the EBIT/EV multiple to compare the earnings yield of companies having different tax rates and debt levels. Investors look for higher values of EBIT/EV multiple, as…
What is Earnings Power Value? Earnings power value is a method of valuing the stocks of a company, assuming that the current earnings are sustainable, and there is no future growth. It means that earnings power value assesses the stocks’ value of a company with an assumption that it will continue to earn…
What is Mean Reversion? Mean reversion is a theory implying that asset prices and historical returns gradually move towards the long-term mean, which can be based on the economy, industry, or average return within a set of data. The greater the deviation from their mean, the higher probability that the next movement of asset prices…
What is a Nonconforming Mortgage? A nonconforming mortgage is a loan for a home that does not follow government-sponsored enterprise (GSE) guidelines. GSE guidelines tend to include maximum loan amounts, downpayment requirements, credit requirements, and more. As the loans do not follow the above requirements and are more difficult to sell, they tend to be…
What is a Voting Trust Certificate? A voting trust certificate is a document used to give temporary voting control over a corporation to one or several individuals. It is issued to a shareholder and represents the normal rights of any other stockholder, such as receiving quarterly dividends in exchange for their common shares. The only…
