Financial Terms | |
Equity Security |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: credit, money, finance, stock trading, financial advisor, investment, financial, accounting, |
Definition of Equity SecurityEquity SecurityAn ownership interest in an enterprise, including preferred and common stock.
Related Terms:Preferred StockA type of equity security where holders have a claim on the assets Available-for-Sale SecurityA debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period. Equity MethodAccounting method for an equity security in cases where the investor has sufficient Nonmarketable SecurityA debt or equity security for which there is no posted price or bidand- Trading SecurityA debt or equity security bought and held for sale in the near term to generate income on short-term price changes. All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the Asset/equity ratioThe ratio of total assets to stockholder equity. Asset-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts Bottom-up equity management styleA management style that de-emphasizes the significance of economic Common stock/other equityValue of outstanding common shares at par, plus accumulated retained Convertible securityA security that can be converted into common stock at the option of the security holder, Debt/equity ratioIndicator of financial leverage. Compares assets provided by creditors to assets provided Deferred equityA common term for convertible bonds because of their equity component and the Derivative securityA financial security, such as an option, or future, whose value is derived in part from the Dual syndicate equity offeringAn international equity placement where the offering is split into two EquityRepresents ownership interest in a firm. Also the residual dollar value of a futures trading account, Equity capAn agreement in which one party, for an upfront premium, agrees to compensate the other at Equity claimAlso called a residual claim, a claim to a share of earnings after debt obligation have been Equity collarThe simultaneous purchase of an equity floor and sale of an equity cap. Equity contribution agreementAn agreement to contribute equity to a project under certain specified Equity floorAn agreement in which one party agrees to pay the other at specific time periods if a specific Equity kickerUsed to refer to warrants because they are usually issued attached to privately placed bonds. Equity marketRelated:Stock market Equity multiplierTotal assets divided by total common stockholders' equity; the amount of total assets per Equity optionsSecurities that give the holder the right to buy or sell a specified number of shares of stock, at Equity swapA swap in which the cash flows that are exchanged are based on the total return on some stock Equity-linked policiesRelated: Variable life EquityholdersThose holding shares of the firm's equity. Euroequity issuesSecurities sold in the Euromarket. That is, securities initially sold to investors Exchangeable Securitysecurity that grants the security holder the right to exchange the security for the Fixed-dollar securityA nonnegotiable debt security that can be redeemed at some fixed price or according to Foreign equity marketThat portion of the domestic equity market that represents issues floated by foreign companies. GEMs (growing-equity mortgages)Mortgages in which annual increases in monthly payments are used to Host securityThe security to which a warrant is attached. Hybrid securityA convertible security whose optioned common stock is trading in a middle range, causing Investor's equityThe balance of a margin account. Related: buying on margin, initial margin requirement. Leveraged equityStock in a firm that relies on financial leverage. Holders of leveraged equity face the Long-term debt to equity ratioA capitalization ratio comparing long-term debt to shareholders' equity. Monthly income preferred security (MIP)Preferred stock issued by a subsidiary located in a tax haven. Mortgage pass-through securityAlso called a passthrough, a security created when one or more mortgage Preferred equity redemption stock (PERC)Preferred stock that converts automatically into equity at a Primitive securityAn instrument such as a stock or bond for which payments depend only on the financial Return on equity (ROE)Indicator of profitability. Determined by dividing net income for the past 12 SecurityPiece of paper that proves ownership of stocks, bonds and other investments. Security characteristic lineA plot of the excess return on a security over the risk-free rate as a function of Security deposit (initial)Synonymous with the term margin. A cash amount of funds that must be deposited Security deposit (maintenance)Related: Maintenance margin security market line (SML). A description of Security market lineLine representing the relationship between expected return and market risk. Security selection decisionChoosing the particular securities to include in a portfolio. Shareholders' equityThis is a company's total assets minus total liabilities. A company's net worth is the Stockholder equityBalance sheet item that includes the book value of ownership in the corporation. It Stockholder's equityThe residual claims that stockholders have against a firm's assets, calculated by Stratified equity indexingA method of constructing a replicating portfolio in which the stocks in the index Top-down equity management styleA management style that begins with an assessment of the overall Total debt to equity ratioA capitalization ratio comparing current liabilities plus long-term debt to Underlying securityOptions: the security subject to being purchased or sold upon exercise of an option Variable price securityA security, such as stocks or bonds, that sells at a fluctuating, market-determined price. RATE OF RETURN ON STOCKHOLDERS’ EQUITYThe percentage return or profit that management made on each dollar stockholders invested in a company. Here’s how you figure it: RATIO OF DEBT TO STOCKHOLDERS’ EQUITYA ratio that shows which group—creditors or stockholders—has the biggest stake in or the most control of a company: STOCKHOLDERS’ (OR OWNERS’) EQUITYThe value of the owners’ interests in a company. EquityFunds raised from shareholders. Contra-equity accountAn account that reduces an equity account. An example is Treasury stock. EquityAmounts contributed to the company by the owners (contributed capital) plus the residual earnings of the business (retained earnings). Shareholders' equityThe total amount of contributed capital and retained earnings; synonymous with stockholders' equity. Stockholders' equityThe total amount of contributed capital and retained earnings; synonymous with shareholders’ equity. debt-to-equity ratioA widely used financial statement ratio to assess the equityRefers to one of the two basic sources of capital for a business, the owners' equityRefers to the capital invested in a business by its shareowners return on equity (ROE)This key ratio, expressed as a percent, equals net stockholders' equity, statement of changes inAlthough often considered Cost of EquitySame as the cost of common stock. Sometimes viewed as the Return on Common Equity RatioA measure of the percentage return earned on the value of the Security Market LineA graph illustrating the equilibrium relationship between the Fixed-income securityA security that pays a specified cash flow over a EquityThe difference between the total of all recorded assets and liabilities on the balance Marketable securityAn easily traded investment, such as treasury bills, which is Owners' equityThe total of all capital contributions and retained earnings on a business’s SecurityEither the collateral on a loan, or some type of equity ownership or debt, such floating-rate securitysecurity paying dividends or interest that vary with short-term interest rates. security market lineRelationship between expected return and beta. EquityOwnership. Common stock represents equity in a corporation. Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Social Security Act of 1935A federal Act establishing Old Age and Survivor’s Debt SecurityA security representing a debt relationship with an enterprise, including a government Held-to-Maturity SecurityA debt security for which the investing entity has both the positive SecurityA share or an interest in a property or an enterprise such as a stock certificate or a bond. Shareholders' EquityThe residual interest or owners' claims on the assets of a corporation Debt/Equity RatioA comparison of debt to equity in a company's capital structure. EquityThe net worth of a business, consisting of capital stock, capital (or paid-in) surplus (or retained earnings), and, occasionally, certain net worth reserves. Common equity is that part of the total net worth belonging to the common shareholders. Total equity includes preferred shareholders. The terms common stock, net worth, and common equity are frequently used interchangeably. Equity Buy-BackRefers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount. Quasi-EquityFunds, other than paid-up capital and retained earnings, employed in a business and which will remain in a business as permanent capital. SecurityCollateral offered by a borrower to a lender to secure a loan. Security ValueThe monetary value placed on security by a lender in determining the extent to which it can make loans against such security. Shareholder's EquityRepresents the total assets of a corporation less liabilities. equityThe net worth of a company. This represents the ownership interest of the shareholders (common and preferred) of a company. For this reason, shares or stocks are often known as equities. Equity-based insuranceLife insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio. Equity investmentThrough equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock. Common stockThese are securities that represent equity ownership in a company. Common shares let an Common stock equivalentA convertible security that is traded like an equity issue because the optioned Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |