Business: Chapter 19

  1. Bond Indenture
    a legal document that details all the conditions relating to a bond issue
  2. Budget
    a financial statement that projects income and/or expenditures over a specified future period
  3. Capital Budget
    a financial statement that estimates a firm’s expenditures for major assets and its long-term financing needs
  4. Cash Budget
    a financial statement that estimates cash receipts and cash expenditures over a specified period
  5. Cash Flow
    the movement of money into and out of an organization
  6. Chief Financial Officer (CFO)
    a high-level corporate executive who manages a firm’s finances and reports directly to the company’s chief executive officer or president
  7. Commercial Paper
    a short-term promissory note issued by a large corporation
  8. Common Stock
    stock whose owners may vote on corporate matters but whose claims on profits and assets are subordinate to the claims of others
  9. Convertible Bond
    a bond that can be exchanged, at the owner’s option, for a specified number of shares of the corporation’s common stock
  10. Convertible Preferred Stock
    preferred stock that an owner may exchange for a specified number of shares of common stock
  11. Corporate Bond
    a corporation’s written pledge that it will repay a specified amount of money with interest
  12. Debenture Bond
    a bond backed only by the reputation of the issuing corporation
  13. Debt Capital
    borrowed money obtained through loans of various types
  14. Equity Capital
    money received from the owners or from the sale of shares of ownership in a business
  15. Factor
    a firm that specializes in buying other firms’ accounts receivable
  16. Financial Leverage
    the use of borrowed funds to increase the return on owners’ equity
  17. Financial Management
    all the activities concerned with obtaining money and using it effectively
  18. Financial Plan
    a plan for obtaining and using the money needed to implement an organization’s goals
  19. Floor Planning
    method of financing in which title to merchandise is given to lenders in return for short-term financing
  20. Initial Public Offering (IPO)
    when a corporation sells common stock to the general public for the first time
  21. Investment Banking Firm
    an organization that assists corporations in raising funds, usually by helping to sell new issues of stocks, bonds, or other financial securities
  22. Lease
    an agreement by which the right to use real estate, equipment, or other assets is transferred temporarily from the owner to the user
  23. Long-Term Financing
    money that will be used for longer than one year
  24. Maturity Date
    the date on which a corporation is to repay borrowed money
  25. Mortgage Bond
    a corporate bond secured by various assets of the issuing firm
  26. Par Value
    an assigned (and often arbitrary) dollar value printed on a stock certificate
  27. Preferred Stock
    stock whose owners usually do not have voting rights but whose claims on dividends and assets are paid before those of common-stock owners
  28. Prime Interest Rate
    the lowest rate charged by a bank for a short-term loan
  29. Private Placement
    occurs when stock and other corporate securities are sold directly to insurance companies, pension funds, or large institutional investors
  30. Promissory Note
    a written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date
  31. Registered Bond
    a bond registered in the owner’s name by the issuing company
  32. Retained Earnings
    the portion of a corporation’s profits not distributed to stockholders
  33. Risk-Return Ratio
    a ratio based on the principle that a high-risk decision should generate higher financial returns for a business and more conservative decisions often generate lesser returns
  34. Serial Bonds
    bonds of a single issue that mature on different dates
  35. Short-Term Financing
    money that will be used for one year or less
  36. Sinking Fund
    a sum of money to which deposits are made each year for the purpose of redeeming a bond issue
  37. Speculative Production
    the time lag between the actual production of goods and when the goods are sold
  38. Term-Loan Agreement
    a promissory note that requires a borrower to repay a loan in monthly, quarterly, semiannual, or annual installments
  39. Trade Credit
    a type of short-term financing extended by a seller who does not require immediate payment after delivery of merchandise
  40. Trustee
    an individual or an independent firm that acts as a bond owners’ representative
  41. Unsecured Financing
    financing that is not backed by collateral
  42. Zero-Base Budgeting
    a budgeting approach in which every expense in every budget must be justified
Card Set
Business: Chapter 19
Business: Chapter 19