Waterfall Payment

What is a ‘Waterfall Payment’ A waterfall payment is a type of payment scheme in which higher-tiered creditors initially receive interest and principal payments first, while the lower-tiered creditors receive principal payments only after the higher-tiered creditors are paid back in full. Debtors typically structure these schemes into such traunches to prioritize the highest principal … Read more

Constellation Brands May Fall on Flat Beer Sales

Constellation Brands, Inc. (STZ) owns many brands of wines, spirits and beers, including the popular Corona and Modelo franchises. The better-established beer giant Anheuser Busch InBev SA/NV (BUD) has fallen flat despite the “Dilly Dilly” campaign. It seems like the key again this quarter is beer over wine and spirits. Constellation Brands stock closed Wednesday, June 27, … Read more

Bank Stress Test

What is a ‘Bank Stress Test’ A bank stress test is an analysis conducted under hypothetical unfavorable economic scenarios, such as a deep recession or financial crisis, designed to determine whether a bank has enough capital to withstand the impact of adverse economic developments. In the United States, banks with $50 billion or more in … Read more

Investment Income

What is ‘Investment Income’ Investment income is that which comes from interest payments, dividends, capital gains collected upon the sale of a security or other assets, and any other profit made through an investment vehicle of any kind. Generally, individuals earn most of their total net income each year through regular employment income. However, disciplined … Read more

Flotation Cost

Loading the player… What is a ‘Flotation Cost’ Flotation costs are incurred by a publicly traded company when it issues new securities, and includes expenses such as underwriting fees, legal fees and registration fees. Companies must consider the impact these fees will have on how much capital they can raise from a new issue. Flotation … Read more

Commercial Loan

What is a ‘Commercial Loan’ A commercial loan is a debt-based funding arrangement between a business and a financial institution such as a bank, typically used to fund major capital expenditures and or cover operational costs that the company may otherwise be unable to afford; as opposed to a loan made to an individual. Expensive … Read more