Super Finance Glossary
Over 10,000 financial glossary terms...
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Level Payment Mortgage
Definition: A loan that requires the same payment each month (or other period) for full amortization.
Definition: A loan that requires the same payment each month (or other period) for full amortization.
Level Term Insurance
Definition: A life insurance policy with a fixed face value and increasing premiums.
Definition: A life insurance policy with a fixed face value and increasing premiums.
Level-coupon Bond
Definition: Bond with a stream of coupon payments that remain the same throughout the life of the bond.
Definition: Bond with a stream of coupon payments that remain the same throughout the life of the bond.
Leverage
Definition: The use of debt financing, or property of rising or falling at a proportionally greater amount than comparable investments. For example, an option is said to have high leverage compared to the underlying stock because a given price change in the stock may result in a greater increase or decrease in the value of the option. Also, commonly known as Gearing in Europe.
Definition: The use of debt financing, or property of rising or falling at a proportionally greater amount than comparable investments. For example, an option is said to have high leverage compared to the underlying stock because a given price change in the stock may result in a greater increase or decrease in the value of the option. Also, commonly known as Gearing in Europe.
Leverage Clientele
Definition: A group of shareholders who, because of their personal leverage, seek to invest in corporations that maintain a compatible degree of corporate leverage.
Definition: A group of shareholders who, because of their personal leverage, seek to invest in corporations that maintain a compatible degree of corporate leverage.
Leverage Ratios
Definition: Measures of the relative value of stockholders, capitalization, and creditors obligations, and of the firm's ability to pay financing charges. Value of firm's debt to the total value of the firm (debt plus stockholder capitalization).
Definition: Measures of the relative value of stockholders, capitalization, and creditors obligations, and of the firm's ability to pay financing charges. Value of firm's debt to the total value of the firm (debt plus stockholder capitalization).
Leverage Rebalancing
Definition: Making transactions to adjust (rebalance) a firm's leverage ratio to a target ratio.
Definition: Making transactions to adjust (rebalance) a firm's leverage ratio to a target ratio.
Leveraged Beta
Definition: The beta of a leveraged required return; that is, the beta as adjusted for the degree of leverage in the firm's capital structure.
Definition: The beta of a leveraged required return; that is, the beta as adjusted for the degree of leverage in the firm's capital structure.
Leveraged Buyout (LBO)
Definition: A transaction used to take a public corporation private that is financed through debt such as bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment-grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an LBO through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an LBO fund that specializes in such investments.
Definition: A transaction used to take a public corporation private that is financed through debt such as bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment-grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an LBO through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an LBO fund that specializes in such investments.
Leveraged Equity
Definition: Stock in a firm that relies on financial leverage. Holders of leveraged equity experience the benefits and costs of using debt.
Definition: Stock in a firm that relies on financial leverage. Holders of leveraged equity experience the benefits and costs of using debt.
Leveraged Investment Company
Definition: An investment company or mutual fund entitled to borrow capital for its operations. Also, an investment company that issues both income shares and capital shares.
Definition: An investment company or mutual fund entitled to borrow capital for its operations. Also, an investment company that issues both income shares and capital shares.
Leveraged Lease
Definition: A lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset. The lender has a lien on the assets and a pledge of the lease payments to secure the borrowing.
Definition: A lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset. The lender has a lien on the assets and a pledge of the lease payments to secure the borrowing.
Leveraged Portfolio
Definition: A portfolio that includes risky assets purchased with funds borrowed.
Definition: A portfolio that includes risky assets purchased with funds borrowed.
Leveraged Recapitalization
Definition: Often used in risk arbitrage. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing shares, leaving the public shareholders with a continuing interest in a more financially leveraged company. Popular form of shark repellent See: Stub.
Definition: Often used in risk arbitrage. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing shares, leaving the public shareholders with a continuing interest in a more financially leveraged company. Popular form of shark repellent See: Stub.
Leveraged Required Return
Definition: The required return on an investment when the investment is financed partially by debt.
Definition: The required return on an investment when the investment is financed partially by debt.
Leveraged Stock
Definition: Stocks financed with credit, such as that purchased on a margin account.
Definition: Stocks financed with credit, such as that purchased on a margin account.
Liability
Definition: A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation.
Definition: A financial obligation, or the cash outlay that must be made at a specific time to satisfy the contractual terms of such an obligation.
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