Month: August 2020

The unlevered cost of capital is an evaluation using either a hypothetical or actual debt-free scenario to measure a company’s cost to implement a particular capital project. The unlevered cost of capital should illustrate that the project is a less expensive alternative than a levered cost of capital investment program. Unlevered cost of capital is a variation on the cost of capital calculation. Investors may also use the unlevered cost of the capital method to determine if the company is a sound investment. read more

Fraud is an intentionally deceptive action designed to provide the perpetrator with an unlawful gain or to deny a right to a victim. Fraud can occur in finance, real estate, investment, and insurance. It can be found in the sale of real property, such as land, personal property, such as art and collectibles, as well as intangible property, such as stocks and bonds. Types of fraud include tax fraud, credit card fraud, wire fraud, securities fraud, and bankruptcy fraud.

Generally speaking, 457 plans are non-qualified, tax-advantaged, deferred compensation retirement plans offered by state governments, local governments, and some nonprofit employers. Eligible participants are able to make salary deferral contributions, depositing pre-tax money that is allowed to compound without being taxed until it is withdrawn.

A bubble is an economic cycle characterized by the rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive sell-off occurs, causing the bubble to deflate.

Gross domestic income (GDI) is a measure of U.S. economic activity based on all the income earned while engaged in producing all the goods, services, and anything else that constitutes that economic activity.

A bubble is an economic cycle characterized by the rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive sell-off occurs, causing the bubble to deflate.

Gross domestic income (GDI) is a measure of U.S. economic activity based on all the income earned while engaged in producing all the goods, services, and anything else that constitutes that economic activity.

Tax avoidance is the use of legal methods to modify an individual’s financial situation to lower the amount of income tax owed. This is generally accomplished by claiming the permissible deductions and credits. This practice differs from tax evasion which uses illegal methods, such as underreporting income, to avoid paying taxes.

A targeted accrual redemption note is an exotic derivative that terminates when a limit on coupon payments to the holder is reached. Target accrual redemption notes (TARN) have the distinguishing feature of being subject to early termination. If the accumulation of coupons reaches a predetermined amount before the settlement date, the holder of the note receives a final payment of the par value and the contract ends.

Dry powder is a slang term referring to marketable securities that are highly liquid and considered cash-like. Dry powder can also refer to cash reserves kept on hand by a company, venture capital firm or individual to cover future obligations, purchase assets or make acquisitions. Securities considered to be dry powder could be Treasuries or other short-term fixed income investment that can be liquidated on short notice in order to provide emergency funding or allow an investor to purchase assets. read more