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| company officer responsible for managing a corporation's finance function. primarily oversees a corporation's working capital decisions, capital budgeting and structure decisions |
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| corporation officer who handles and monitors a corps accounting and audit activities. oversees taxes, internal cost acctg, financial external acctg as well as data collecting/processing systems |
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| company officer responsible for managing a corps finance function. smaller companies tend to use the title, short-term financial mgmt., cash/credit/inventory mgmt., capital investment mgmt., long-term financial planning are all responsibilities |
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| interaction between shareholders and mgmt. intended to assure that mgmt. uses invested capital to maximize shareholder value |
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| form of biz org, biz owned by one person |
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| form of biz org, formed by 2 or more individuals |
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| form of biz org, limited liability, corporate taxes, easily transferable |
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| method of providing return to shareholders via buying back stock |
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| method of providing return to the shareholders when corporate share price increases |
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| cash flow available for distribution to shareholders after paying all corporate taxes |
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| net income / equity, measures how efficiently firm utilizes shareholder's investment dolalrs |
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| right, but not an obligation, to buy stock from the company at a fixed price during a specific time |
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| when one company purchases a majority interest in the acquired |
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| partial or full disposal of an investment or asset via sale, exchange, closure or bankruptcy. can be done slowly and systematically over time, or in lrg lots over short time |
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| conflict of interest arising between creditors, shareholders, and mgmt. bc of different goals |
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| increase in # of outstanding shares while making no change in shareholder's equity |
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| company that attempts to acquire another company against the wishes and efforts of mgmt. of the target company. launched many hostile takeover attempts of poorly performing companies in the 80s |
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| takeover attempt that is strongly resister by the target firm |
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| riskier bond that is considered non investment grade by a major rating agency |
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| shareholder's right to vote on the shareholder meetings |
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| defense mechanism against unwanted takeovers when the board of directors is staggered so that 1/4 of the members are elected each yr and serve a 4 yr term |
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| defense mechanism against unwanted takeovers when the target company finds a friendly merger candidate |
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| defense mechanism against unwanted takeovers when the target company employs a counter-takeover bid for the raider |
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| defense mechanism against takeover when the target company purchases the acquirer's shares at a premium over the market price |
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| defense mechanism against takeovers when the target company provides compensation to top-level executives in the event of a change of corporate control |
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| defense mechanism against unwanted takeover when the target company agrees to purchase some of the current outstanding shares from its shareholders, usually at a price above what the acquiring company is offering |
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| defense mechanism against unwanted takeovers when the target company gives current shareholders the right to purchase shares of the company at a bargain price, contingent on another firm acquiring control |
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| defense mechanism against takeovers when the target company sells off its major assets |
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| an attempt to gain control of a firm by soliciting a sufficient amount of votes to replace the existing mgmt |
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| most common type of investment company which holds lrg investment portfolio of assets that is divided up into small shares and sold to investors |
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| when investing parties use info not readily available to the public when making trading decisions |
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| includes commercial banks, investment banks, insurance companies, mutual funds, corps, governments, and any other lrg pool of assets that invest in financial markets |
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| active involvement of shareholders in corporate governance via influencing mgmt. decisions |
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| board of directors functions |
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Definition
hiring, firing, and rewarding mgmt.
reviewing mgmt.'s performance
setting overall policy and the strategic direction of the corp. |
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| managerial market labor (external control mechanism) |
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| the manager's ability to create shareholder value is reflected in pay for executives |
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| market for corporate control (external control mechanism) |
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| poorly managed companies are acquired by other companies and existing mgmt. is fired |
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| shareholder activism (external control mechanism) |
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| large investors become aggressive in corporate governance issues due to poor corporate performance |
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| when an acquiring company makes an offer to purchase shares in a target company for the purpose of gaining control |
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| a going-private transaction in which a tender offer for all of a firm's common stock, financed mostly by debt, is made by an investment group |
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| occurs when the prospective acquirer solicits voting proxy statements from shareholders in an attempt to gain control of the Board of Directors |
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| involves staggering the election of the board of directions so that 1/4 of the board members are elected each year and sere a 4 year term |
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| Anglo-American model aka fluid model |
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| U.S., U.K., and Australia have adopted. involves primarily minority shareholders who elect board members to represent their interests. free of institutional constraints, capital easily flows. |
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| Japanese and Germany have adopted. common shares are owned by investors who will not trade or sell the shares. viewed as long-term capital |
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| Japan based model. group of companies formed around a large financial institution, which operates under a common institutional name and shares operational and managerial expertise. they own each others shares, aka cross-holding of common stock and never sell. |
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| financial institution that is the primary supplier of debt and equity capital and that has a large influence ofn mgmt. through the board |
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| eastern Europe, Africa, south America, much of asia have adopted. a large investor, which could be the government, a family, a fin. instit., owns a majority of the outstanding common stock and therefore effectively controls corporate resources, sets goals/objectives, policy, and strategy. |
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