The truth in lending act (TILA) was introduced in 1968 to protect credit consumers from misleading and predatory practices of lenders. It mainly requires lenders to provide information to borrowers necessary to make informed decisions about a lending offer. Let us discuss what is TILA, how it works, and how it benefits borrowers. Truth in […]
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The corporate veil protects business owners from financial and legal liabilities of the business. It is provided to limited liability companies (LLCs) and corporations. Piercing the corporate veil means shareholders of a business do not enjoy impunity. Let us discuss these two concepts in detail and see how the corporate veil works. What is a
What is the Corporate Veil and What Does Piercing the Corporate Veil Mean? Read More »
The constant growth formula uses the dividend growth rate and the required rate of return to calculate the intrinsic value of a stock. Let us discuss what is the constant growth model and how we can use it to calculate the stock price. What is Gordon’s Constant Growth Model? The Gordon Growth Model (GGM) or
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Short selling or shorting is a trading strategy that refers to selling borrowed stocks or other investment instruments. Traders look for quick gains when they anticipate a price fall in any of the asset’s prices. It requires a margin account and trades are placed using leverage offered by the brokers. Let us discuss what is
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Short-selling or shorting is a risky trading strategy. It requires careful planning and execution to make it work. That’s why it is recommended for experienced traders only and experts do not suggest it for novice traders. Let us discuss what is the short-selling mechanism, its risks, and its rewards. Short Selling – Mechanism Short selling
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A wash sale transaction is when taxpayers try to “wash” capital losses on trading transactions. As a taxpayer, you cannot sell a stock at a loss and immediately repurchase the same or identical securities within 30 days. Let us discuss what is the wash sale rule, how it works, and how you can avoid it.
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Hedge funds and private equity funds are pooled investments that offer high investment returns to investors. Both types of funds seek similar investment goals with contrasting tactics. Let us discuss what are hedge funds and private equity funds and their key differences. What is a Hedge Fund? Hedge funds are pooled investments that seek high
Hedge Fund Vs Private Equity Fund – What are the Key Differences? Read More »
The intrinsic value of a stock option is the theoretical profit of the option. However, a stock option also has extrinsic value. Let us discuss what is the intrinsic value of a stock option and how to calculate it. Intrinsic Value of Stock Options The intrinsic value of a stock option is the value or
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What are debt securities? Debt securities are referred to as debt instruments that are brought or sold between two parties with basic terms defined. The basic terms include the Notional Amount (i.e. the borrowed principal), as well as the interest rate, and the dates (both, maturity date and the date at which the bond can
7 Risks Associated with investing in Debt Securities: What Are They? Read More »
A share repurchase is a method where a company buys back its shares from its existing shareholders. Companies repurchase their shares to control the number of outstanding shares and hence key financial performance metrics. A company can use one of the top 4 methods of share repurchase arrangements discussed in detail below. Share Repurchase Arrangement
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