What Is a Bargain Purchase? A bargain purchase involves assets acquired for less than fair market value. In a bargain purchase business combination, a corporate entity is acquired by another for an amount that is less than the fair market value of its net assets. Current accounting rules for business combinations require the acquirer to…
Changes in interest rates can have different effects on consumer spending habits depending on a number of factors, including current rate levels, expected future rate changes, consumer confidenceand the overall health of the economy. Key Takeaways Central banks adjust target interest rates in a country, raising them to increase the cost of borrowing when the…
Micron Technology, Inc. (IN) stock is trading higher by nearly 5% on Wednesday morning after the company posted profits of $0.45 per share, beating second quarter 2020 estimates by a wide margin. Revenues at $4.8 billion came up short, but shareholders were encouraged by third quarter 2020 revenue guidance between $4.6 billion and $5.2 billion,…
What Is Fixed Capital? Fixed capital includes the assets and capital investmentssuch as property, plant, and equipment (PP&E), that are needed to start up and conduct business, even at a minimal stage. These assets are considered fixed in that they are not consumed or destroyed during the actual production of a good or service but…
There are five main indicators of investment risk that apply to the analysis of stocks, bonds, and mutual fund portfolios. They are alpha, beta, r-squaredstandard deviation, and the Sharpe ratio. These statistical measures are historical predictors of investment risk/volatility and they are all major components of modern portfolio theory (MPT). MPT is a standard financial…
The Vanguard mutual fund family is one of the largest and most well-recognized fund families in the financial industry. Their funds are considered extremely liquid, as Vanguard manages dozens of funds with varying investment objectives to fit any investor profile ranging from managed funds to index funds that track specific indexes such as the S&P…
A certain risk level is inherent in running a business, and a company cannot completely eliminate risk. However, a business can control or at least successfully manage risk. In order to do so, management must make decisions and choices regarding acceptable risk levels relative to potential profits. In this context, there are a number of…
What Is the Multilateral Investment Guarantee Agency (MIGA)? The Multilateral Investment Guarantee Agency is an international institution that promotes investment in developing countries by offering political and economic risk insurance. By promoting foreign direct investment into developing countries, the agency aims to support economic growth, reduce poverty, and improve people’s lives. Key Takeaways The Multilateral Investment…
What Is an Automatic Bill Payment? An automatic bill payment is a money transfer scheduled on a predetermined date to pay a recurring bill. Automatic bill payments are routine payments made from a banking, brokerage, or mutual fund account to vendors. Automatic payments are usually set up with the company receiving the payment, though it’s…