What Is a Franking Credit? A franking credit, also known as an imputation credit, is a type of tax credit paid by corporations to their shareholders along with their dividend payments. Australia and several other countries allow franking credits as a way to reduce or eliminate double taxation. Since corporations have already paid taxes on
What Is a Fraption? A fraption is a type of option that gives the holder the opportunity to enter into a forward rate agreement (FRA) with predetermined conditions and within a certain amount of time. Forward rate agreements are contracts to exchange a pre-determine interest rate to be paid on a future date on some notional
What Is a Fraternal Organization? A fraternal organization is a brotherhood or a type of social organization whose members freely associate for a mutually beneficial purpose such as for social, professional or honorary principles. The term fraternal organization is from the Latin frater, meaning brother. Key Takeaways A fraternal organization is a social club or
What Is Fraud? Investopedia / Sydney Saporito Fraud is an intentionally deceptive action designed to provide the perpetrator with an unlawful gain or to deny a right to a victim. Types of fraud include tax fraud, credit card fraud, wire fraud, securities fraud, and bankruptcy fraud. Fraudulent activity can be carried out by one individual, multiple
What Are Fixed-Rate Capital Securities (FRCS)? A fixed-rate capital security (FRCS) is a security issued by a corporation that has a $25 par value (although some are issued with a $1,000 par value) and offers investors a combination of the features of corporate bonds and preferred stock. These securities provide the benefits of attractive yields:
What Is Free Enterprise? Free enterprise, or the free market, refers to an economy where the market determines prices, products, and services rather than the government. Businesses and services are free of government control. Alternatively, free enterprise could refer to an ideological or legal system whereby commercial activities are primarily regulated through private measures. Key Takeaways
What Is a Free Trade Area? A free trade area is a region in which a number of countries have signed a free trade agreement and maintain little or no barriers to trade in the form of tariffs or quotas among one another. Free trade areas facilitate international trade and the associated gains from trade
What Is Free Cash Flow to the Firm (FCFF)? Free cash flow to the firm (FCFF) represents the amount of cash flow from operations available for distribution after accounting for depreciation expenses, taxes, working capital, and investments. FCFF is a measurement of a company’s profitability after all expenses and reinvestments. It is one of the
What Is Free Cash Flow Per Share Free cash flow per share (FCF) is a measure of a company’s financial flexibility that is determined by dividing free cash flow by the total number of shares outstanding. This measure serves as a proxy for measuring changes in earnings per share. Ideally, a business will generate more
What Is Free Cash Flow to Equity (FCFE)? Free cash flow to equity is a measure of how much cash is available to the equity shareholders of a company after all expenses, reinvestment, and debt are paid. FCFE is a measure of equity capital usage. Understanding Free Cash Flow to Equity Free cash flow to
