Seed Financing
What is Seed Financing? Seed financing (also known as seed capital, seed money, or seed funding) is the earliest stage of the capital-raising process of a startup. Seed financing is a type of equity-based financing. In other words, investors commit their capital in exchange for an equity interest in a company. Generally, this is done...
Theory of Liquidity Preference
What is the Theory of Liquidity Preference? The Theory of Liquidity Preference states that agents in financial markets demonstrate a preference for liquidity. Formally, if U(Asset A) > U(Asset B) and rA = rB, then L(Asset A) > L(Asset B), where: U(Asset A) is an investor’s utility from holding asset A U(Asset B) is an investor’s...
Dividend Policy
What is a Dividend Policy? A company’s dividend policy dictates the amount of dividends paid out by the company to its shareholders and the frequency with which the dividends are paid out. When a company makes a profit, they need to make a decision on what to do with it. They can either retain the...
Capital Markets
What are Capital Markets? Capital markets are the exchange system platform that transfers capital from investors who want to employ their excess capital to businesses that require the capital to finance various projects or investments. Types of Capital Markets Capital markets primarily feature two types of securities: equity securities and debt securities. Both are forms...
Stochastic Oscillator
What is the Stochastic Oscillator? The Stochastic Oscillator is an indicator that compares the most recent closing price of a security to the highest and lowest prices during a specified period of time. It gives readings that move (oscillate) between zero and 100 to provide an indication of the security’s momentum. The stochastic readings are...
