When the general bank funds are not enough, in addition to mutual borrowing between peers, loans are financed to the central bank. The method of borrowing is to repay existing commercial bills to the central bank to obtain funds. This interest rate paid at repayment is called the repayment rate (also called weighted repayment rate, repayment rate).
The rebate rate is the interest rate at which commercial banks apply to the central bank for the rebate of their outstanding bills. A high rebate rate determines the cost of financing. A high rebate rate, a high financing cost, and a tight central bank liquidity are part of the austerity monetary policy.
If you want to predict possible changes in market interest rates, the discount rate is often the best preliminary indicator.
Green bond fraud, also known as premium buyback, refers to the large-scale purchase by an individual or a group of investors of shares in a target company, where the target company is forced to buy back the said shares at a premium for the sake of preventing the acquisition ("fraud") in order to induce the said shareholder to sell the shares to the company and abandon the intention of further acquisition.
This type of buyback is specific and does not apply to other shareholders. In countries such as Europe and the United States, green ticket fraud is the speculative purchase of large amounts of a company's shares in an attempt to sell them at a higher price to the company's acquirer, or to sell the shares back to the company at a higher price to avoid that part of the shares falling into the hands of the company's acquirer.
Hostile mergers and acquisitions, also known as malicious mergers, usually involve a non-consensual purchase of the target company by the acquirer against the wishes of the target company; or a merger without prior negotiation with the target company, where the acquirer suddenly makes a price or offer directly to the shareholders of the target company.
In a hostile merger, a company usually buys shares of the target company from shareholders at a transaction price of about 20% to 40% above the market price. Therefore, for the acquirer, the acquisition requires a large amount of financial support, and banks or securities brokers often provide short-term financing in larger merger activities.
At the same time, the acquired company may take all countermeasures, such as issuing new shares to dilute the shares, or acquiring shares that have already been issued abroad, etc., after learning of the acquirer's intention to acquire the company, which will increase the cost of the acquisition and reduce the success rate.
Theoretically, as long as the acquiring company receives 51% of the shares, the board can be reorganized to eventually achieve the purpose of the merger.
The Golden Parachute is a compensation clause for senior executives under the terms of a change in control of a company in a contract of employment. It was first produced in the United States. The Golden Parachute refers to the rich compensation, while the Golden Parachute refers to the smooth transition of executives who can avoid the shock of a change in control of a company.
The golden parachute stipulates that in the event of a target company being acquired, senior executives of the company, either on their own initiative or forced to leave the company, can receive a large settlement compensation fee, which can reach tens of millions or even hundreds of millions of dollars, thus increasing the acquisition costs of the acquirer, becoming a defense against malicious acquisitions.
A convertible bond is a bond that can be converted into shares of the bond issuing company, usually at a lower interest rate. Essentially, a convertible bond is based on the bond of the issuing company, with an option that allows the buyer to convert the bond he purchases into shares of the designated company within a specified time frame.
Open market operations, which refer to the policy of central banks buying and selling government bonds in financial markets to control the money supply and interest rates, are currently an important and commonly used tool for central banks to control the money supply in most developed countries (more precisely, most market economies).
When the economy is overheated, the central bank sells government bonds in return for money, which reduces the money supply, causing interest rates to rise, and encouraging a decrease in investment, in order to achieve the purpose of compressing aggregate social demand. When the economy is too slow to grow and investment is slow to decline, the central bank buys government bonds, puts money on the market, increases the money supply, and causes interest rates to fall, thereby stimulating investment growth and expanding aggregate demand.
Reverse mortgage pension insurance is an innovative form of pension insurance that combines a mortgage mortgage with a life-long pension insurance, i.e. an elderly person who has full ownership of the house, mortgages his property to an insurance company, continues to have the right to own, use, profit and disposal of the house and receives a pension under the agreed conditions until his death; upon the death of an elderly person, the insurance company obtains the right to dispose of the mortgaged property, and the disposal proceeds will be used as a priority to pay the pension insurance related costs.
The term "protectionist" refers to the policy of imposing restrictions on imports in foreign trade to protect domestic goods from foreign competition in the domestic market and to offer various incentives to domestic goods in order to enhance their international competitiveness.
In the case of import restrictions, the main measures are two: tariff barriers and non-tariff barriers.
The former is mainly aimed at preventing large imports of foreign goods by imposing high import tariffs; the latter includes a series of non-tariff measures to restrict the free importation of foreign goods, such as import licensing, import quotas and so on.
The weighted average cost of capital (WACC) is an important indicator of a company's overall operating performance, representing the company's overall average cost of capital, which investors generally use to gauge whether their company's projects are worth investing in.
The WACC is calculated by calculating the cost of capital or the required rate of return for each of the items that make up the company's capital structure, such as ordinary shares, preferred shares, corporate bonds and other long-term liabilities, and then weighting these rates by the weighting of the items in the capital structure, i.e. calculating the weighted average cost of capital.
The price-to-book value ratio (P/BV) refers to the ratio of the share price to the net asset per share. The market rate can be used for investment analysis. In general, stocks with a lower market value have a higher investment value and, conversely, a lower investment value.
Special Purpose Vehicle (SPV), Chinese for special purpose vehicle/company. General asset securitization is implemented by an independent special purpose vehicle, which is responsible for purchasing, packaging and issuing securitized assets on the basis of which it raises funds for a broad range of investors. The activities of special-purpose entities are strictly limited by law, they have a low capitalization and are funded entirely by the income from the issuance of securities. Special-purpose entities are the principal intermediary for the conversion of assets into securities and are an important means of achieving bankruptcy isolation.
The DFL, Degree Of Financial Leverage, is a multiple of the after-tax profit per share of a common stock relative to its pre-tax profit, also known as financial leverage, and is commonly used to reflect the size and role of financial leverage and to assess the size of a company's financial risk.
Translated from the investment guide