Glossary of Business, Corporate Finance and Investment Terms


This is a corporation where more than 50% of the voting shares of its stock is owned by another corporation called the Parent Corporation.


The exchange of one security of a corporation for another security of the same corporation. For example, bonds may be swapped for preferred stock.


This is a change in the voting or controlling interest of a corporation.


This person is a corporate officer responsible for the receipt, custody, investment, and disbursement of funds. In addition, the Treasurer has responsibility for the borrowing of funds and recording changes in stock ownership. In some firms, the Treasurer is also the Controller or chief accountant.

Treasury Stock

This is stock purchased by the corporation from stockholders, thus reducing the amount of outstanding stock. The stock is purchased for cash and held for possible issuance or sale in the future. The cash received by the seller is not taxed as dividend income. Treasury Stock has no voting rights and receives no dividends.

Vertical Merger

A merger between a corporation that supplies goods and / or services, and a corporation that uses those goods and / or services.

Virtual Bank

A Virtual Bank or Direct Bank is a bank without a network of branches. It offers its banking services by using the internet, telephones, email, mail, and automatic teller machines. Virtual Banks have substantially lowered operating costs which allows them to charge lower fees and interest on loans while paying account holders higher interest rates.

War Chest

Liquid assets set aside by a corporation to be used to takeover another corporation or defend against a possible takeover.

Wasting Asset

These are assets that irreversibly decline in value over time. These types of assets include vehicles, machines, computers, office furniture, and other fixed assets. Depreciation schedules are assigned to Wasting Assets, thus the loss in value is recognized each year.

Watered Stock

Watered Stock is stock that is issued at a price that is much greater than the value of the underlying assets of the corporation. The assets can be overvalued for many reasons including accounting manipulations and fraud.

Working Control

See Effective Control

Zero Coupon Bond or Note

A bond or note that makes no periodic interest payments but is sold at a discount in order to yield a return.


A company that continues to operate even though it is insolvent and heading towards bankruptcy.


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