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C&C
can mean: Cash and Carry or
Collection & Classification.
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C&I (COST & INSURANCE)
, in a price that
is quoted “C&I”, means that the cost of the product and insurance
are included in the quoted price. In this case, the cost of shipping would
be borne by the buyer.
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C.A.
is sometimes used to identify the Chief
Accountant
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C/S RATIO
see CONTRIBUTION/SALES RATIO.
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CAD
see CASH AGAINST DOCUMENTS.
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CAFR
see Comprehensive Annual Financial Report.
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CALL CENTER
is the part of an organization
that handles inbound/outbound communications with customers.
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CALL PREMIUM
is a premium in price
above the par value of a bond or share of preferred stock that must be
paid to holders to redeem the bond or share of preferred stock before
its scheduled maturity date.
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CALL PROVISION
is a. a provision of
a bond or preferred stock issue, listed in its indenture (the formal
agreement between the bond issuer and the holder) that allows the issuer
to redeem the bond before the maturity date either at par or at a premium
to par; or, b. a clause in a mortgage giving the lender the right to
demand and receive payment of the balance of the unpaid principal in
full under certain conditions. A call provision is similar to an acceleration
clause.
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CALLABLE BOND
is a bond the issuer
has the right to pay off at issuer's discretion.
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CANDY DEAL
is a slang term that refers
to an illegal business practice to inflate revenue/sales numbers by selling
product to distributors with a pledge to buy them back later, in addition
to providing a percentage kickback to the distributor for assisting in
falsifying the sale.
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CAP
is a series of European interest
rate call options used to protect against rate moves above a set strike
level.
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CAP RATE
see CAPITALIZATION RATE.
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CAPEX
see CAPITAL EXPENDITURE.
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CAPITAL
, in economics, can mean: factories,
machines, and other man-made inputs into a production process. In finance,
capital is money and other property of a corporation or other enterprise
used in transacting the business.
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CAPITAL ACCOUNT
, in finance, is an
account of the net value of a business at a specified date; in economics,
it is that part of the balance of payments recording a nation's outflow
and inflow of financial securities.
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CAPITAL ADDITION
is a. new (as opposed
to replacement) part added to an existing non-current productive asset
(e.g., equipment) used for business purposes that increases the useful
life and service potential of the asset; or, b. in taxation, cost of
capital improvements and betterments made to the property by a taxpayer.
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CAPITAL ASSET PRICING MODEL (CAPM)
is an equilibrium
model which describes the pricing of assets, as well as derivatives.
The model concludes that the expected return of an asset (or derivative)
equals the riskless return plus a measure of the assets non-diversiable
risk ("beta") times the market-wide risk premium (excess expected
return of the market portfolio over the riskless return). That is: expected
security return = riskless return + beta x (expected market risk premium).
It concludes that only the risk which cannot be diversified away by holding
a well-diversified portfolio (e.g. the market portfolio) will affect
the market price of the asset. This risk is called systematic risk, while
risk that can be diversified away is called diversifiable risk (or "nonsystematic
risk"). Unfortunately, The CAPM is more difficult to implement in
practice than the binomial option pricing model or the Black-Scholes
formula because to price an asset it requires measurement of the asset's
expected return and its beta. But, on the other hand, it also attempts
to answer a more difficult question: The binomial option pricing model
or the Black-Scholes formula asks what is the value of a derivative relative
to the concurrent value of its underlying asset. The CAPM asks what is
the value of an asset (or derivative) relative to the return of the market
portfolio. Because of this, the option models are often referred to as "relative" valuation
models, while the CAPM is considered an "absolute" valuation
model. William Sharpe won the Nobel Prize in Economics principally for
his role in the development of the CAPM.
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CAPITAL CHARGE
is a monetary amount, calculated by
multiplying the money the business has tied up in capital, by the weighted
average cost of capital (WACC). Capital charge is deducted from net operating
profit after tax to arrive at Economic Profit.
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CAPITAL COMMITMENT
is an agreement
to undertake capital expenditure at some set time in the future which
has not yet become an actual liability.
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CAPITAL CONTRIBUTION
is cash or property
acquired by a corporation from a shareholder without the receipt of additional
stock.
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CAPITAL EMPLOYED
is the value of the
assets that contribute to a company's ability to generate revenue, i.e,
fixed assets plus current assets minus current liabilities.
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CAPITAL EXPENDITURE (CAPEX)
is the
amount used during a particular period to acquire or improve long-term
assets such as property, plant or equipment.
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CAPITAL EXPENDITURE RATIO
is the ratio
of capital expenditure and other investments to total assets. It is used
as a proxy for growth opportunities in a financial analysis.
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CAPITAL FUNDS
is the total of capital
debentures, if any, capital stock, if any, surplus, undivided profits,
unallocated reserves, guaranty fund, and guaranty fund surplus.
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CAPITAL GAIN
is the excess of selling
price over purchase price, which may be given special treatment for tax
purposes provided the sale takes place more than a given number of months
after purchase.
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CAPITAL IMPROVEMENT
, in real estate,
is any permanent structure or other asset added to a property that adds
to its value. In general, it is any value added activity or cost to a
long-term or permanent asset that increases its value.
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CAPITAL IN EXCESS OF PAR
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CAPITAL INFUSION
often refers to the
cross-subsidization of divisions within a firm. When one division is not
doing well, it might benefit from an infusion of new funds from the more
successful divisions. In the context of venture capital, it can also refer
to funds received from a venture capitalist to either get the firm started
or to save it from failing due to lack of cash.
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CAPITAL INTENSIVE
is used to describe
industries or sectors of the economy that require large investments in
capital assets to produce their goods, such as the automobile industry.
These firms require large profit margins and/or low costs of borrowing
to survive.
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