A default premium is the additional interest rate that a borrower must pay for a loan that is considered to be high risk. This premium compensates the lender for the increased risk of default. Default risk is typically measured by a credit rating agency, and loans with lower credit ratings will carry higher default premiums. … Read more
Litigation risk is the risk of a company being sued. This can happen for a variety of reasons, including breach of contract, personal injury, or product liability. Litigation risk can have a major financial impact on a company, as it can cost millions of dollars to defend against a lawsuit. Additionally, a company may be … Read more
A hiring freeze is a suspension of new hiring by an employer, typically during periods of economic uncertainty. The hiring freeze may be temporary or permanent, depending on the needs of the employer. The main purpose of a hiring freeze is to reduce costs by slowing or stopping the growth of the workforce. This can … Read more
Interlocking directorates are a type of business arrangement in which two or more companies have members of their board of directors who are also members of the board of directors of the other company or companies. This type of arrangement can lead to conflicts of interest and can be used to gain control of a … Read more
Capitalization of profits refers to the reinvestment of profits back into the business in order to finance growth or expansion. This can be done through the issuance of new shares, the purchase of new assets, or the repayment of debt. Capitalization of profits can be a risky strategy as it can lead to over-leveraging and … Read more
Clawback: What It Is, What It Means, How It Works, and Examples. Can employer claw back bonus? No, an employer cannot claw back a bonus. A bonus is a form of compensation that is generally given to an employee in recognition of good work or in order to retain the employee. Once the bonus has … Read more
Central purchasing is the process by which a company centralizes the buying of goods and services. This can be done for a number of reasons, including to get better prices from suppliers, to streamline the purchasing process, or to allow the company to better control its inventory. When a company centralizes its purchasing, it typically … Read more
Obsolete inventory is unsold inventory that is no longer useful or relevant to the company. This can happen for a variety of reasons, such as changes in consumer tastes, technology, or the company’s product mix. Obsolete inventory can tie up a lot of a company’s capital, and it can be expensive to store. As a … Read more
Modified Internal Rate of Return – MIRR is a financial metric used to evaluate the profitability of an investment or project. The MIRR takes into account the time value of money and reinvestment rate of return, making it a more accurate measure of true project profitability than the traditional Internal Rate of Return (IRR) metric. … Read more
The antidilutive definition refers to a situation where the addition of new shares would actually increase the earnings per share (EPS) of a company. This can happen when a company issues new shares to raise capital, but the new shares are purchased by existing shareholders at a price that is higher than the current market … Read more
