FINANCIAL GLOSSARY








Below is a glossary of financial terms written by us.
Simply click on a term to access its definition.
[For a correct use of this glossary, please consult these "notes"]

puce WACC

[Weighted Average Cost of Capital]
The average of the expected cost of all the financing instruments of a company.
An expected rate is allocated to each financing source ( stock, bonds and other debt instruments).
These rates are then weighted in proportion to their share in the overall liabilities of the company.

puce Waiting Period (USA)

The period of time between the filing of a registration statement with the SEC and the date when it is declared effective.
See also Gun-Jumping, Quiet Period and Effective Date.

puce Warrant

Another word for an option to purchase a security.
The term is generally used for options which are transferable and are sold to outside investors (as distinct from officers, employees, etc.)
A warrant is a long term option, usually valid for several years or indefinitely.
Typically, warrants are issued concurrently with preferred stocks or bonds in order to increase the appeal of the stocks or bonds to potential investors, such as seen in mezzanine finance.

puce Warranty

A security which gives the holder the right to purchase shares in a company at a pre-determined price.
A warrant is a long term option, usully valid for several years or indefinitely.
Typicaly, warrants are issued concurrently with preferred stocks or bonds in order to increase the appeal of the stocks or bonds to potential investors, such as seen in mezzanine finance.

puce Weighted Average

Anti-dilution provisions that apply a weighted average formula to adjust the option price or conversion ratio of an early-round investor, based on the sale price and number of common equivalent shares sold by the company after the issuing of the option or convertible security.
As an example, if a first round of financing raised €1 million of capital at €2.00 per share and the first round investors received weighted average anti-dilution protection, and a second round of financing was consummated for another €1 million at €1.00 per share, then the first round investors would have the right to convert their shares at a weighted average adjusted price of €1.50 per share.

puce White Knight

A company that makes a friendly take-over offer to a target company that is being faced with a hostile take-over from a third party.
Usually a rescue strategy at the request of the target company to oppose the hostile offer.

puce Window on Technology

Interest mainly expressed by industrial corporations to access to new technologies via venture capital investments.

puce Working Capital

The cash resources a company needs to operate as a going concern on a daily basis.
Such resources may be internally generated in the form of retained profits or proceeds of sales of assets or provided externally by shareholders, creditors and banks.
Corresponds to the difference between current assets and current liabilities.

puce Write Down

An accounting procedure that gradually reduces the book value of an intangible asset through periodic charges to income.

puce Write-off

Accounting process that changes the value of an asset to an expense or a loss.
A write-off is used to reduce or eliminate the value of an asset and reduce profits.

puce Write-up

In accounting the increase of the value of an investment.





 

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