Vocabulary Finance

Vocabulary Finance

PROXY: An agent legally authorized to act on behalf of another party. Shareholders not attending a company's annual meeting may choose to vote their shares by proxy by allowingsomeone else to cast votes on their behalf.

DIVESTITURE: The partial or full disposal of an investment or asset through sale, exchange, closure or bankruptcy. Divestiture can be done slowly andsystematically over a long period of time, or in large lots over a short time period.
 
SPIN-OFF/CARVE OUT: The creation of an independent company through the sale or distribution of new shares of anexisting business/division of a parent company. A spinoff is a type of divestiture. Sometimes known as a partial spinoff, a carve out occurs when a parent company sells a minority (usually 20% orless) stake in a subsidiary for an IPO or rights offering.

SYNERGIES: The idea that the value and performance of two companies combined will be greater than the sum of the separate individual parts.MARKET CAPITALISATION: The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the currentmarket price of one share. The investment community uses this figure to determining a company's size, as opposed to sales or total asset figures.

CROSS FERTILISATION OF BRANDS: Mutual exchange, asbetween dissimilar concepts, cultures, or classifications that enhances understanding or produces something beneficial.

STRATEGIC FIT: Express the degree to which an organization is matching itsresources and capabilities with the opportunities in the external environment.

PORTOFOLIOS: Is a collection of investments held by an institution or an individual.

PREMIUM: The total cost ofan option. The difference between the higher price paid for a fixed-income security and the security's face amount at issue. The specified amount of payment required periodically by an insurer to...