. Flashcards
stock Exchange
Stock exchange facilities, stock brokers to trade companies, stocks, and other securities
Equity financing
Equity financing is the process of raising capital through the sale of shares
Debt financing
The act of raising capital by borrowing money from the lender or a bank to be repaid at the future date
portfolio
All investments owned by an individual or organisation
Interest
The price paid for borrowing money paid to the lenders
commodity market
Trade in a row or primary products rather than manufactured products
principle
Business principal are the core values that guide companies decision and behaviour
tax deductible
Means expenses or contributions that can lower the amount of taxes you all
dividend
Payments by companies to their shareholders
Bull market
when the investments prices are rising
Beer market
when the investments prices are falling
coupon
The amount of interest that bonds pay is
Break even point
That point when the total cost and total revenue are equal
going bankrupt
Unable to pay ones debts
underwriting the issue
The process through which an individual or institution takes on financial risks for a fee
Listed companies
listed companies means a company who has its equity share capital officially listed on a particular stock exchange
maturity, date of a bond
The date on which the principal amount of the note, draft acceptance, bond, or other debt instrument becomes due
Bond
Certificates of debt issued by governments or companies to raise money
stock and shares
Certificates representing part ownership of a company
Yield
The rate of income, an investor receives from security
to plunge
To fall very quickly, and suddenly
Market leader
A company with the largest market share in the industry they are the one who has the highest revenue, every other company tried to copy the strategy, etc
Market Challenger
The company already hoarding, the majority share in the market and competing with the current market leader
Market followers
strategy used by an organisation who imitate what the market leader does
USP
Unique, selling proportion means informing customers about how our own brand or product is better than its competitors
market segment
Dividing a market into distinct groups of buyers who have different requirements or buying habits
niche
a focused to differentiate themselves from the competition
equities
part ownership of a company in the form of stocks or shares
horizontal integration
Is when a company gets bigger by acquiring competitors in the same field of activity
Vertical integration
Is acquiring companies involved in other parts of the supply chain usually to make cost savings
backward integration
Is acquiring suppliers of raw materials or components
forward integration
Is buying distributors or retail outlets
raid
A company can buy as many shares as possible on the stock market to gain majority
takeover bid
A company can offer to buy all shareholder’s shares at the certain price at during a limited period of time
friendly takeover bid
If a company’s board of directors agree to take over
friendly takeover
If the shareholders agreed to sell, it becomes friendly takeover
hostile takeover bid
If the company doesn’t want to be taken over
hostile takeover
When the taken over progress is successful
Joint venture
Two or more companies decide to work together for a specific project or product
controlling interest
when he or she owns more than 50% of the company is voting shares, giving him or her the deciding voice in shareholders meetings and control over companies direction
Diversify
when companies can also buy businesses in completely different fields to reduce the risk involved in operating in only one industr
conglomerate
Group of companies operating in different fields which have joined together
subsdiary
Economically it belongs to the founding company. The parent company can support it with money, take financial resource from it.
market capitalisation
The total value of the companies share of stocks
Pension fund
create an opportunity for its members to save for their retirement years during the active years, using the income of the active years in save an efficient way
What are the two main ways established companies can raise money?
They can issue bonds and shares
What are the two main ways governments can raise money?
They can raise taxes and issue bonds
how do companies regular the finance their activities?
with issuing bonds by way of internally generated, cash flows. If they need more money, they can either sell shares or borrow, usually by using bonds
what companies do when they want to expand?
Increase advertising, use social media, follows trends making products or services partner with other businesses franchising
what’s the difference between bonds and shares in terms of income and repayment?
Bonds offer fixed interest payments, while shares provide income through dividends and capital gains
Explain the meaning of public in the name of public limited company
public it’s legally allowed to every person to buy shares in a company
describe market, structure, and composition
Market structure is when companies are able to differentiated and categorised based on the type of goods they sell, and how external factors and elements influence their operation
Market competition is in a business environment for different firms located both within and out of the country had to compete with one another solelz on the merits of the goods and services
what is the difference between horizontal and vertical integration?
Horizontal when a company, gets a bigger about acquiring competitors in the same field
Vertical is acquiring companies involved in other parts of a the supply chain
what is the difference between backward and forward integration?
in short backward integration involves buying part of the supply chain that occurs priority, companies manufacturing process while forward integration involves buying part of the process that occurs after the companies manufacturing process
what is the difference between a raid and takeover bid?
raid is when a company can buy as many shares as possible on the stock market, but a takeover bid is when a company can offer to buy shareholders during a limited period of time
What’s the difference between a friendly and a hostile takeover bid
Friendly takeover bid if the shareholders agrees to sell
Hostile takeover bid: hostile takeover merely requires the shareholders agreement
