CORPORATE FINANCE

Definition: A shareholder is an individual or institution that owns stock in a corporation or other company. Shareholders are also known as stockholders. Types of Shareholders: Rights of Shareholders: Responsibilities of Shareholders: Additional Notes: FAQs

An agency problem occurs when two parties, known as principals, delegate tasks to an intermediary agent who is not a direct employee of the principals. The agent is responsible for acting on behalf of the principals and executing tasks on their behalf. Key Features of Agency Problems: Examples of Agency Problems: Solutions to Agency Problems: […]

The Internal capital Adequacy Assessment Process (ICAAP) is a process used by banks and other financial institutions to assess their own capital adequacy. It involves a comprehensive review of the institution’s financial position and operations to determine its ability to withstand a range of potential losses. Key Steps in the ICAAP: 1. Data Collection:– Gather […]

Definition: Rationalization is the process of simplifying and codifying mathematical expressions by removing fractional powers and simplifying radicals. It is a technique used in mathematics to simplify and manipulate expressions. Steps involved in rationalization: Examples: 1. Rationalize the following expression: 3/x + 5/x Solution: 3/x + 5/x = (3 + 5) / x = 8/x […]

The derivative is a fundamental concept in mathematics that describes the rate of change of a function. It is a measure of how much the function changes when its input changes. Definition: The derivative of a function f with respect to a variable x, denoted by f'(x) or df/dx, is the instantaneous rate of change […]

Definition: Restructuring is the process of reorganizing a company’s operations or assets to improve its financial performance, increase its efficiency, or achieve other strategic goals. It involves making fundamental changes to the company’s structure, operations, or ownership. Types of Restructuring: Common Restructuring Techniques: Reasons for Restructuring: Conclusion: Restructuring is a complex process that involves significant […]

Treasury stock is a term used in accounting to describe the securities that a company has purchased from its own treasury. These securities are often used to manage cash flow and liquidity. Types of Treasury Stock: Reasons for Purchasing Treasury Stock: Accounting Treatment: Treasury stock is generally accounted for at cost and is not recorded […]

Definition: Trade finance is a type of financing that provides working capital to importers and exporters during the trade cycle. It involves facilitating payments, managing credit risks, and providing other financial services related to international trade. Key Components: Benefits: Types of Trade Finance: Examples: Conclusion: Trade finance plays a crucial role in facilitating international trade […]

The cost of capital refers to the cost of borrowing funds at a certain interest rate. It is an important concept in finance and investment as it helps in determining the cost of various projects and investments. Formula: The cost of capital can be calculated using the following formula: r = (1 + i/n)^(n*t) – […]

Ease of Doing Business (EDB) refers to the factors that make it easy for businesses to operate and thrive in a particular jurisdiction. It encompasses various factors, including: Legal Framework: Business Formation and Regulation: Ease of obtaining business licenses and permits, navigating regulatory compliance, and adhering to legal requirements. Taxation: Simplicity of tax compliance, reasonable […]