What Is a Revertible Bond? A revertible bond, also known as a reverse convertible bond, or simply as “revertible,” is a type of convertible bond that automatically converts to that company’s common stock if that stock’s price drops below a pre-determined price threshold. Advisor Insight A revertible bond refers to a special type of convertible corporate
What is the Revlon Rule The Revlon rule is the legal principle stating that a company’s board of directors shall make a reasonable effort to obtain the highest value for a company, when a hostile takeover is imminent. This represents somewhat of a shift in responsibility, because boards of directors are primarily tasked with preventing
What Is a Revocable Beneficiary? A revocable beneficiary does not have guaranteed rights to receive compensation from an entity such as an insurance policy or a trust fund. The policy owner reserves the right to make changes to who receives payment, change the terms of the policy, or terminate the policy without the need of revocable beneficiary consent. Most
What Is a Revocable Trust? A revocable trust is a trust whereby provisions can be altered or canceled depending on the wishes of the grantor or the originator of the trust. During the life of the trust, income earned is distributed to the grantor, and only after death does property transfer to the beneficiaries of
What Is a Revolver? A revolver refers to a borrower—either an individual or a company—who carries a balance from month to month, via a revolving credit line. Borrowers are only obligated to make minimum monthly payments, which go toward paying interest and reducing principal debt. Revolvers are used in finance by corporations to fund working
What Is a Revolving Loan Facility? A revolving loan facility is a form of credit issued by a financial institution that provides the borrower with the ability to draw down or withdraw, repay, and withdraw again. A revolving loan is considered a flexible financing tool due to its repayment and re-borrowing accommodations. It is not
What Is Revenue Per Available Room (RevPAR)? Revenue per available room (RevPAR) is a metric used in the hospitality industry to measure hotel performance. The measurement is calculated by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate. RevPAR is also calculated by dividing a hotel’s total room revenue by the total
What Was the Reconstruction Finance Corporation (RFC)? The Reconstruction Finance Corp. (RFC) was an agency authorized by the U.S. government to loan money to assist the nation’s ailing banks after the stock market crash of 1929 and during the Great Depression that followed. Congress created the RFC in 1932 with a limited mandate to issue emergency
What Is Recency, Frequency, Monetary Value (RFM)? Recency, frequency, monetary value (RFM) is a model used in marketing analysis that segments a company’s consumer base by their purchasing patterns or habits. In particular, it evaluates customers’ recency (how long ago they made a purchase), frequency (how often they make purchases), and monetary value (how much money
What Is the Risk-Free Rate Puzzle (RFRP)? The risk-free rate puzzle (RFRP) is a market anomaly observed in the persistent difference between the lower historic real returns of government bonds compared to equities. This puzzle is the inverse of the equity premium puzzle and looks at the disparity from the perspective of the lower returning
