Term of the Day

holding company

Type of business organization that allows a firm (called parent) and its directors to control or influence other firms (called subsidiaries). Thisarrangement makes venturing outside one's core industry possible and, under certain conditions, to benefit from tax consolidation, sharing of operating losses, and ease of divestiture. The legal definition of a holding company varies with the legal...
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Usage Example
The sole purpose of a holding company is to have control over another company, rather than produce their own goods and services.
Term of the Day

yield

  1. The annual rate of return on an investment, expressed as a percentage.
  2. For bonds and notes, the coupon rate divided by the market price. This is not an accurate measure of total return, since it does not factor in capital gains.
  3. For securities, the annual dividends divided by the purchase price. This is not an accurate measure of total return, since it does not factor incapital gains. here,
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Usage Example
The money that is returned to shareholders in the form of dividends is also called a yield.