Category: Business – This Explainer

Share dilution occurs when additional shares or share equivalents reduce existing ownership percentages. This explainer covers offerings, conversions, employee awards, earnings per share, voting power, capital raised, and disclosure.

Preferred stock typically has priority over common stock for dividends and liquidation but fewer voting rights. This explainer covers cumulative dividends, call and conversion terms, rate sensitivity, credit risk, and prospectus review.

Corporate bonds let companies borrow from investors under defined terms. This explainer covers principal, coupon, maturity, seniority, covenants, credit ratings, interest-rate risk, liquidity, and default.

Yield to maturity combines a bond’s price, coupon, principal, and time remaining into one annualized rate. This explainer covers discounting, reinvestment, calls, default risk, taxes, and why quoted yield is not guaranteed.

Bond duration summarizes cash-flow timing and approximates how price may react to a change in yield. This explainer covers Macaulay and modified duration, maturity, coupon, convexity, embedded options, and portfolio use.

Credit spread compensates investors for risks beyond a reference government or swap rate. This explainer covers default, recovery, liquidity, maturity, embedded options, market conditions, and spread interpretation.

Bankruptcy brings debtors and creditors into a court-supervised process. This explainer covers liquidation and reorganization, the automatic stay, creditor priority, executory contracts, plans, discharge, and why insolvency is not identical to bankruptcy.

Chapter 11 is a bankruptcy framework for reorganizing or selling a business under court supervision. This explainer covers debtor-in-possession control, first-day motions, financing, claims, disclosure, creditor voting, confirmation, and liquidation plans.

U.S. antitrust law targets conduct and transactions that harm competition. This explainer covers the Sherman, Clayton, and FTC Acts, agreements among rivals, monopolization, merger review, market definition, remedies, and compliance.

Horizontal integration joins competitors or similar operations. This explainer covers scale, capacity, geographic reach, overlapping products, merger review, concentration, efficiencies, customer effects, and integration risk.

Vertical integration connects adjacent stages of a value chain under one company. This explainer covers supply assurance, coordination, margins, capital commitment, transfer pricing, foreclosure risk, data access, and make-or-buy discipline.

A corporate spin-off separates a business into an independent company by distributing its shares to the parent’s shareholders. This explainer covers transaction structure, allocation of debt and assets, tax conditions, stranded costs, governance, and valuation.