The dividend per share divided by the stock price.
dividend yield
A market for trading U.S. dollars in foreign countries.
Eurodollar market
A finance company to which businesses sell their accounts receivable, usually for a percentage of the total face value.
factor
Bonds with interest rates that change with current interest rates otherwise
available in the economy.
floating-rate bonds
The sale of stocks and bonds for corporations.
investment banking
A special type of higher-interest-rate bond that carries higher inherent risks.
junk bonds
An arrangement by which a bank agrees to lend a specified amount of money to the organization upon request.
line of credit
An address, often a commercial bank, at which a company receives payments in order to speed collections from customers.
lockbox
Production facilities, offices, and equipment—all of which are expected to last for many years.
long-term (fixed) assets
Debts that will be repaid over a number of years, such as long-term loans and bond issues.
long-term liabilities
Temporary investments of extra cash by organizations for up to one year:
U. S. Treasury bills, certificates of deposit, commercial paper, or Eurodollar loans.
marketable securities
Central locations where investors buy and sell securities.
organized exchanges
A network of dealers all over the country linked by computers, telephones, and teletype machines.
over-the-counter (OTC) market
The market where firms raise financial capital.
primary market
The interest rate that commercial banks charge their best customers for shortterm loans.
prime rate
Earnings after expenses and taxes that are reinvested in the assets of the firm and belong to the owners in the form of equity.
retained earnings
Stock exchanges and over-the-counter markets where investors can trade their securities with other investors rather than the company that issued the stock or bond.
secondary markets
Bonds that are backed by specific collateral that must be forfeited in the event that the issuing firm defaults.
secured bonds
Loans backed by collateral that the bank can claim if borrowers fail to repay
them.
secured loans
The mechanism for buying and selling securities.
securities markets
A sequence of small bond issues of progressively longer maturity.
serial bonds
Credit extended by suppliers for the purchase of their goods and services.
trade credit
Cash kept on hand by a firm to pay bills such as employee wages, supplies,
and utilities.
transaction balances
Short-term debt obligations the U. S. government sells to raise money.
Treasury bills (T-bills)
Bonds that are not backed by specific collateral; also called debentures.
unsecured bonds
Loans backed only by the borrower’s good reputation and previous credit
rating.
unsecured loans
The management of short-term (current) assets and liabilities.
working capital management
