Discount for Lack of Marketability (Stock) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Discount for Lack of Marketability?The Discount for Lack of Marketability, often called a liquidity discount, is a fixed amount or percentage deducted from the selling price of a block of shares that lacks marketability. These are the closely held or...

Discount for Lack of Voting Rights (Stock) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Discount for Lack of Voting Rights?It is a fixed amount or percentage deducted for the selling price of a block of shares that lacks voting rights.How Does a Discount for Lack of Voting Rights Work?Some companies issue two types of shares in the market, each...

Dry Powder (Finance) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is Dry Powder?Dry powder is an informal term used for describing highly-liquid marketable securities, cash reserves, or any other securities that can be utilized for investment opportunities, future obligations, and operational expenses. Most commonly, it refers...

Derivative Securities – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What are Derivative Securities?A derivative security is a financial contract between two parties for buying or selling a property, assets, commodity, or other security at a predetermined price within a specific time period. Generally, a derivative security is a...

Earnings Per Share – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What are Earnings Per Share?Earnings per share (EPS) is an accounting measure. It is calculated by deducting preferred dividends from net income and then dividing that number of outstanding common shares. Preferred shareholders receive preferential payments before...

Diversification Strategy (Investments) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is Diversification in Finance?Diversification is a strategy to minimize the risk by diversifying the investment in various sectors. It is allocating the fund in various ways, including separate financial institutions, diverse industries, and investment type....