What Is a Cashless Conversion? A cashless conversion is the direct conversion of ownership, from one type of security to another, without any initial cash outlay by the holder. For instance, the conversion of a convertible bond from debt to equity in the form of common stock. Contracts for convertible securities define all the terms
What Is a Cashless Exercise? A cashless exercise, also known as a “same-day sale,” is a transaction in which an employee exercises their stock options by using a short-term loan provided by a brokerage firm. The proceeds from exercising the stock options are then used to repay the loan. In this respect, a cashless exercise
What Is Cash Management? Cash management is the process of collecting and managing cash flows. Cash management can be important for both individuals and companies. In business, it is a key component of a company’s financial stability. For individuals, cash is also essential for financial stability while also usually considered as part of a total wealth
What Is a Cash Market? A cash market is a marketplace in which the commodities or securities purchased are paid for and received at the point of sale. For example, a stock exchange is a cash market because investors receive shares immediately in exchange for cash. Cash markets are also known as spot markets because
What Is Cash Neutral? The term cash neutral refers to an investment strategy that involves the sale and purchase of securities in an investment portfolio that results in zero net cash. Key Takeaways Cash neutral is an investment strategy involving the sale and purchase of securities in a portfolio that results in zero net cash.Sales
What Is Cash-on-Cash Return? A cash-on-cash return is a rate of return often used in real estate transactions that calculates the cash income earned on the cash invested in a property. Put simply, cash-on-cash return measures the annual return the investor made on the property in relation to the amount of mortgage paid during the
What Is Cash-on-Cash Yield? Cash-on-cash yield is a basic calculation used to estimate the return from an asset that generates income. Cash-on-cash yield also refers to the total amount of distributions paid annually by an income trust as a percentage of its current price. The cash-on-cash yield is a measurement technique that can be used
What Is Cash on Delivery (COD)? Cash on delivery (COD) is a type of transaction where the recipient pays for a good at the time of delivery rather than using credit. The terms and accepted forms of payment vary according to the payment provisions of the purchase agreement. Cash on delivery is also referred to
What Is a Cash or Deferred Arrangement (CODA)? A cash or deferred arrangement (CODA) is a method of funding any type of qualified profit-sharing, stock-bonus, pre-ERISA money-purchase pension plan, or a rural cooperative plan. According to the Internal Revenue Service (IRS), these are the only types of plans that can contain a Cash or Deferred
What Is a Cash-Out Refinance? A cash-out refinance is a mortgage refinancing option that lets you convert home equity into cash. A new mortgage is taken out for more than your previous mortgage balance, and the difference is paid to you in cash. In the real estate world, refinancing in general is a popular process for replacing
