Archives: Resources

Yield to Maturity (YTM)

What is the Yield to Maturity (YTM)? Yield to Maturity (YTM) – otherwise referred to as redemption or book yield – is the speculative rate of return or interest rate of a fixed-rate security, such as a bond. The YTM is based on the belief or understanding that an investor purchases the security at the…

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CCPPO Shares

What are CCPPO Shares? CCPPO (Cumulative, Convertible, Participating, Preferred-dividend Ordinary) shares are a rare type of equity shares issued by a company, which contain multiple features, including cumulative dividends, participation, convertibility into common shares, and a preferred-dividend feature. Understanding CCPPO Shares Essentially, CCPPO shares represent a combination of common and preferred shares. In the event…

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Profit Before Tax (PBT)

What is Profit Before Tax (PBT)? Profit before tax (PBT) is a measure of a company’s profitability that looks at the profits made before any tax is paid. It matches all the company’s expenses, which include operating and interest expenses, against its revenues, but excludes the payment of income tax. A majority of entrepreneurs start…

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Double Gearing

What is Double Gearing? Double gearing refers to the practice of borrowing money against an asset, with the money being used to buy shares of stock. Then, more money is borrowed against the shares to establish a margin loan that can be used to purchase even more shares. In short, double gearing is a form…

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Credit Event

What is a Credit Event? A credit event refers to a negative change in the credit standing of a borrower that triggers a contingent payment in a credit default swap (CDS). It occurs when an individual or organization defaults on its debt and is unable to comply with the terms of the contract entered, triggering…

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Constant Dividend Payout Ratio Policy

What is a Constant Dividend Payout Ratio Policy? A constant dividend payout ratio policy is a dividend policy in which the percentage of earnings paid in the form of dividends is held constant. In other words, a constant dividend payout ratio policy maintains the same proportion of earnings paid out as dividends to shareholders. Dividend…

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Budget Variance

What is Budget Variance? Budget variance deals with a company’s accounting discrepancies. The term is most often used in conjunction with a negative scenario. An example is when a company fails to accurately budget for their expenses – either for a given project or for total quarterly or annual expenses. (The negative variance can also…

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Supermajority Voting Provision

What is a Supermajority Voting Provision? A supermajority voting provision, an amendment to a company’s corporate charter, is a provision that states that certain corporate actions require much more than a mere majority, typically 67%-90%, approval from its shareholders to pass. In other words, a supermajority voting provision requires greater than a majority shareholder approval…

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Proxy Fight

What is a Proxy Fight? A proxy fight, also known as a proxy contest or proxy battle, refers to a situation in which a group of shareholders in a company joins forces in an attempt to oppose and vote out the current management or board of directors. In other words, a proxy fight is a…

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EBITDAL

What is EBITDAL (Earnings Before Interest, Tax, Depreciation, Amortization, and Special Losses)? EBITDAL stands for Earnings Before Interest, Taxes, Depreciation, Amortization and Special Losses. It is a non-GAAP measure of a company’s earnings that also accounts for special losses that it usually does not expect to incur on a regular basis. EBITDAL is a variation…

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