What is a Dividend Rate? The dividend rate is the amount of cash returned by a company to its stockholders on an annual basis as a percentage of the market value of the company. The cash returned to investors is called a dividend, hence the term dividend rate. Dividend Rate Formula The dividend rate can…
A negotiable instrument ensures payment of a specified amount to a designated person, either on-demand or at a set time. It functions like a contract, containing vital details like principal amount and signatures. Unlike non-negotiable instruments, negotiable instruments can be transferred, granting the new holder full legal rights. Various types exist, including personal checks, traveler’s…
What are Money Market Funds? Money market funds are open-ended fixed income mutual funds that invest in short-term debt securities, such as Treasury bills, municipal bills, and short-term corporate and bank debt instruments that come with low credit risk and emphasize liquidity. Understanding Money Market Funds Money market securities typically come with maturities under 12…
What is a Mortality Table? A mortality table is a diagram that shows the death rate for a defined population within a specific rate of time. Also known as a life table or an actuarial table, mortality tables are used in business by insurance companies to price insurance products and schemes for individuals. …
What is a Memorandum of Understanding (MOU)? A memorandum of understanding, or MOU, is defined as an agreement between parties and can be bilateral (two) or multilateral (more than two parties). The MOU serves as an expression of aligned will between the parties in question and depicts the intent of a common line of action….
What is Marxian Economics? Marxian economics refers to a school of economic thought that was derived from Karl Marx and Friedrich Engels, who were 19th-century philosophers and economists. Marxian economics arose as a critique of classical political economy and later as a critique of capitalism. Marxian economics’ critique of capitalism was mainly focused on the…
What is Mobile Banking? Mobile banking refers to the use of a mobile device to carry out financial transactions. The service is provided by some financial institutions, especially banks. Mobile banking enables clients and users to carry out various transactions, which may vary depending on the institution. Currently, mobile banking’s become easier with the development…
What is Corporate Strategy? Corporate Strategy takes a portfolio approach to strategic decision-making by looking across all of a firm’s businesses to determine how to create the most value. In order to develop a corporate strategy, firms must look at how the various businesses they own fit together, how they impact each other, and how…
What is Sandbagging? Sandbagging occurs when a person or company intentionally lowers its estimation for success with the goal of producing greater-than-expected results. In business, managers may engage in this practice as a way of reducing the expectations of shareholders and investors, knowing very well that they will exceed those expectations. Employees may also engage…
What is a Horizontal Merger? A horizontal merger occurs when companies operating in the same or similar industry combine together. The purpose of a horizontal merger is to more efficiently utilize economies of scale, increase market power, and exploit cost-based and revenue-based synergies. Reasons for a Horizontal Merger When companies undergo a horizontal merger, the…
