instruction
stringlengths 5
1.05k
| output
stringlengths 6
22.3k
| input
stringclasses 1
value |
|---|---|---|
what is a tenancy at will | a tenancy at will is a property tenure that can be terminated at any time by either the tenant or the owner landlord it exists without a contract or lease and it usually doesn t specify the duration of a tenant s rental or the exchange of payment the agreement is governed by state law and the terms can vary by state although federal law comes into play in cases of discrimination estate at will is another name for a tenancy at will the estate at will or tenancy at will agreement is generally beneficial to both tenants and owners who may wish to have the flexibility to change rental situations easily and without breaking a contract | |
how a tenancy at will works | tenants who have permission from their landlords to reside in a property but don t have leases generally have a tenancy at will these tenancies are sometimes called month to month or at will agreements there s no formal contract specifying the length of time during which the tenancy will take place a tenancy at will defines the relationship between the landlord and tenant when strict terms such as those contained within a lease agreement aren t present or are defective terms may have expired a tenancy at will agreement may also be created at the beginning of the landlord tenant relationship tenancies at will are effective if there s an oral agreement instead of a written one between the two parties or if there s a written agreement stating either that the tenancy is on a month to month basis or there s no specified timeline they can also be effective if the tenancy is continued after the original lease expires but a new one hasn t yet been signed 1tenancies at will generally involve parties who are known to each other they may take place between family members in some cases tenancy at will protectionsboth parties are afforded certain legal protections governing the relationship even in the absence of a written agreement for example the landlord must provide a safe environment as required by law the landlord must also provide notice before entering the tenant occupied property as governed by local statutes 2the tenant also has certain unspoken responsibilities that they must fulfill even under a tenancy at will rent payments must be made and the tenant must adhere to any rules they ve agreed upon with the landlord the tenant is also responsible for any damages beyond normal wear and tear on the property both parties must follow local regulations when it comes to vacating or having the property vacated a notice to vacate is normally required to terminate a tenancy at will even though there s no formal agreement vacating a tenancy at willa tenancy at will arrangement may not have written and agreed upon requirements regarding notification of intention to vacate but terms are generally spelled out within local landlord tenant regulations it s not uncommon for a 30 day notice to apply to both the tenant and the landlord thirty days notice must be provided to the other party if the tenant intends to vacate or if the landlord wants the tenant to vacate a reason for the request to vacate is not required to be cited by either party the notice is traditionally provided in writing landlords in an at will arrangement in maine can evict tenants without giving a reason but they must give a 30 day written notice of the intended eviction but certain circumstances can allow a landlord to give a tenant a seven day notice to vacate in a tenancy at will agreement in this state these circumstances can include serious damage to the premises being a perpetrator of domestic violence or sexual assault and being at least seven days in arrears for rent 3there are also circumstances when a tenancy at will can be terminated without the need for a notice to vacate the tenancy agreement is nullified if the tenant or property owner dies or if the landlord decides to sell the property other types of tenanciesthe most common type of tenancy is a tenancy for years in which the rental agreement is for a fixed period it has a specified beginning and termination date at which point the tenant is expected to vacate the premises the lease s end date is already set so there s generally no need for a notice to vacate but the landlord may choose to renew the lease a periodic tenancy allows a tenant to remain within the property for an undetermined period because the lease has no set end date the lease typically stipulates when notice to vacate is required however and both parties are bound to adhere to that clause | |
what is a right of survivorship and does it affect a tenancy at will | two or more tenants have equal rights to a property when they have rights of survivorship they would automatically inherit another tenant s share in equal proportions if one of them were to die this legal arrangement is most common with property deeds that convey ownership rather than leases a tenancy at will agreement would be dissolved if only one tenant resided in the property and that tenant died whether a roommate could effectively remain in residence would most likely be decided on a case by case basis depending on the relationship between the landlord and tenant and the terms of the tenancy at will agreement 4 | |
what is a holdover tenant | both a tenant at will and a holdover tenant lack formal rental agreements a holdover tenant typically stays on after their fixed term lease has expired the tenant can legally occupy the unit if the landlord continues to accept rental payments otherwise the tenant is considered to be a trespasser and must move out the landlord can begin eviction proceedings if they don t do so or for a variety of other reasons based on state law 5 | |
what is a tenancy at sufferance | a tenant at sufferance is a holdover tenant they may legally occupy a property after their lease expires in a tenancy at sufferance arrangement provided that they re paying rent the landlord is accepting the money and the landlord has not yet issued a notice to vacate there was a lease at one point but that lease has reached its term and has expired 6the bottom linea tenancy at will can provide a measure of flexibility that might appeal to some people and in some situations but there are legal protections inherent in a written signed lease that can safeguard both landlord and tenant in the event of a dispute this might be the case even if you re renting from a friend or family member in the end it s a personal decision and the success of a tenancy at will can depend on the people involved | |
what is tenancy by the entirety | tenancy by the entirety refers to a form of shared property ownership that is usually reserved only for married couples a tenancy by the entirety permits spouses to jointly own property as a single legal entity this means that each spouse has an equal and undivided interest in the property this form of legal ownership creates a right of survivorship if one spouse dies the surviving spouse automatically receives full title to the property | |
how tenancy by the entirety works | tenancy by the entirety can usually only occur when the property owners are married to one another at the time they receive the title however some states do allow tenancy by the entirety for common law spouses and domestic partners this type of legal agreement doesn t apply to other types of partnerships such as friends siblings parent child relationships or business associates 1spouses who mutually own property through tenancy by the entirety are referred to as tenants by entirety each spouse legally has equal rights to ownership of the property in question this allows them to inhabit and use the property as they see fit the condition of mutual ownership of the entire property means the spouses must be in agreement when making decisions about the property for example one spouse doesn t have the legal right to sell off or develop part of the property without the other s consent 1there is no subdivision that separates the property into equal parts between the spouses each owns 100 so even if one spouse writes a will that grants an interest stake in the property to an heir the power and rights of tenancy by the entirety creates a right of survivorship and invalidates and supersedes that aspect of the will requirements of tenancy by the entiretyin order to become tenants by the entirety of a certain property such as a joint brokerage account the prospective tenants must be married at the time they come into ownership of the property specific requirements vary from state to state some states extend tenancy by the entirety to domestic partners or common law spouses 2the establishment of tenancy by the entirety differs across jurisdictions as well in some states any married couple that buys property is assumed to be tenants in the entirety some states may limit tenancy to entirety to real estate only or only to homestead property where the couple resides advantages and disadvantages of tenancy by the entiretythe main advantage of a tenancy by the entirety is to protect the interests of a surviving spouse when one tenant dies there is no possibility that their partner will lose the property there is no need for the property to go through probate and no other heir can evict the surviving spouse but a tenancy by the entirety only prevents the property from being probated if one spouse dies first when the surviving spouse dies the property must be probated as normal the same is true if both spouses die together tenancy by the entirety is not available in all states and it is sometimes restricted to real estate only moreover the couple must own equal shares and be in agreement about any decision covering a property this can cause issues in some relationships while tenancy by the entirety protects the property from claims against one spouse it does not protect it from all claims if both tenants are responsible for a given debt the creditor can still make a claim against the property allows one married partner to inherit the property without probate if their partner dies protects the property from any claims against the deceased partner s estate prevents either partner from placing liens or selling the shared property property is protected from creditors for debt only owed by one partner limited to some states and may be limited to some types of property | |
does not protect the property from claims against shared debts | both partners have equal stakes and must agree on any decisions concerning the property property must still be probated after the second spouse dies common law spouses and domestic partners are only included in certain states tenancy by the entirety vs joint tenancya tenancy by the entirety is similar to a joint tenancy where a property is co owned by two or more people in both types of tenancy there is a right of survivorship upon the death of one owner their share is automatically passed on to the other tenant rather than being probated with their estate however there are some differences while tenants in the entirety are usually required to be a married couple joint tenants can have any type of relationship siblings business partners or even friends 3moreover while a tenancy by the entirety can only be terminated by mutual agreement or the death of a spouse a joint tenancy can unilaterally be ended by either of the tenants all they need to do is sell or transfer their share to another person who then becomes a tenant in common states that allow tenancy by the entiretyeach state has its own laws that govern tenancy by the entirety and how it may be applied though some states allow this form of ownership to exist for all types of property held by married couples others only allow it to be exercised for real estate that is jointly owned by spouses some states also permit domestic partners or common law spouses to jointly own property through tenancy by the entirety 2twenty five states and washington d c allow tenancy by the entirety the states that permit it are other possible structures under which spouses can choose to jointly own property include tenancy in common tic and joint tenancy | |
how is tenancy by the entirety terminated | tenancy by the entirety can be terminated in one of several ways 2as mentioned above a tenancy by the entirety creates a right of survivorship in other words when one spouse dies that person s share in the property is automatically transferred to the surviving spouse this eliminates the need for probate 2 | |
when a couple divorces the parties become tenants in common tic this means they both have ownership rights in the property and can bequeath their share of the property to anyone upon their death 4 courts can order the sale of the property with the proceeds split between the divorcing couple or award full ownership to one party 2 | rights of tenants by entiretytenancy by the entirety forbids one party from selling the property without the other party s consent suppose a married couple purchases a house together through a tenancy by entirety arrangement because the couple purchased the property together each would have a 100 ownership interest 1this status also protects the spouses against certain liens creditors who seek relief on delinquent debt cannot enter claims against any property that is under tenancy by the entirety unless the couple shares that debt the property can only be attached by creditors to whom the married couple owes joint debts 2for example if a borrower owes payments on a motorcycle loan they acquired only for themselves the lender could not put a lien against a house the borrower owns with a spouse because the property is under tenancy by the entirety frequently asked questions | |
what does tenancy by the entirety mean | tenancy by the entirety is a type of property ownership that only applies to married couples the couple is treated as a single legal entity and mutually co owns the property the consent of each is needed to sell or develop it a tenancy by the entirety also creates a right of survivorship when one spouse dies the surviving spouse gains full ownership of the property about half of the u s states allow tenancy by the entirety and some permit it for domestic partners too | |
what happens when a couple divorces | if a couple divorces they become tenants in common which gives them both ownership rights in the property a court can also order the sale of the property the proceeds would be split between the ex spouses or grant full ownership to one spouse | |
what are the benefits of tenancy by the entirety | one major benefit of tenancy by the entirety is that creditors can t place a lien on the property if only one spouse holds the debt also because of the automatic survivorship rights this arrangement provides there is no need for probate which can be costly and time consuming | |
how many states allow tenancy by the entirety | twenty five states plus the district of columbia allow tenancy by the entirety however rules vary by states some restrict the practice to real estate assets or homestead properties certain states also allow domestic partners and common law spouses as well as married couples to use tenancy by the entirety the bottom linetenancy by the entirety is a legal arrangement where a married couple shares equal ownership of a property and ownership automatically passes to the survivor if their partner dies this allows the survivor to avoid probate and protects the home from any claims against the other tenant however this form of co ownership is only available in certain states | |
what is tenancy in common tic | tenancy in common tic is a legal arrangement in which two or more parties share ownership rights to real property it comes with what might be a significant drawback however a tic carries no rights of survivorship each independent owner can control an equal or different percentage of the total property during their lifetimes tenancy in common is one of three types of shared ownership the others are joint tenancy and tenancy by entirety | |
how tenancy in common tic works | owners as tenants in common share interests and privileges in all areas of the property but each tenant can own a different percentage or proportional financial share tenancy in common agreements can be created at any time an additional individual can join as an interest in a property after the other members have already entered into a tic arrangement each tenant can also independently sell or borrow against their portion of ownership a tenant in common can t claim ownership to any specific part of the property even though the percentage of the property owned can vary a deceased tenant s or co owner s share of the property passes to their estate when they die rather than to the other tenants or owners because this type of ownership doesn t include rights of survivorship the tenant can name their co owners as their estate beneficiaries for the property however dissolving tenancy in commonone or more tenants can buy out the other tenants to dissolve the tenancy in common by entering into a joint legal agreement a partition action may take place that might be voluntary or court ordered in cases where an understanding can t be reached a court will divide the property as a partition in kind in a legal proceeding separating the property into parts that are individually owned and managed by each party the court won t compel any of the tenants to sell their share of the property against their will the tenants may consider entering into a partition of the property by sale if they can t agree to work together the holding is sold in this case and the proceeds are divided among the tenants according to their respective shares of the property property taxes under tenancy in commona tenancy in common agreement doesn t legally divide a parcel of land or property so most tax jurisdictions won t separately assign each owner a proportional property tax bill based on their ownership percentage the tenants in common typically receive a single property tax bill a tic agreement imposes joint and several liability on the tenants in many jurisdictions where each of the independent owners may be liable for the property tax up to the full amount of the assessment the liability applies to each owner regardless of the level or percentage of ownership tenants can deduct payments from their income tax filings each tenant can deduct the amount they contributed if the taxing jurisdiction follows joint and several liability they can deduct a percentage of the total tax up to their level of ownership in counties that don t follow this procedure other forms of tenancytwo other forms of shared ownership are commonly used instead of tenancies in common joint tenancy and tenancy by entirety tenants obtain equal shares of a property in a joint tenancy with the same deed at the same time each owns 50 if there are two tenants the property must be sold and the proceeds distributed equally if one party wants to buy out the other the ownership portion passes to the individual s estate at death in a tenancy in common the title of the property passes to the surviving owner in a joint tenancy this type of ownership comes with rights of survivorship some states set joint tenancy as the default property ownership for married couples others use the tenancy in common model a third method that s used in some states is tenancy by entirety tbe the property is viewed as owned by one entity each spouse has an equal and undivided interest in the property under this legal arrangement if a married couple is in a tbe agreement unmarried parties both have equal 100 interest in the property as if each is a full owner contract terms for tenancies in common are detailed in the deed title or other legally binding property ownership documents pros and cons of tenancy in commonbuying a home with a family member or a business partner can make it easier to enter the real estate market dividing deposits payments and maintenance make real estate investment less expensive all borrowers sign and agree to the loan agreement when mortgaging property as tenants in common however the lender may seize the holdings from all tenants in the case of default the other borrowers are still responsible for the full payment of the loan if one or more borrowers stop paying their share of the mortgage loan payment using a will or other estate plan to designate beneficiaries to the property gives a tenant control over their share but the remaining tenants may subsequently own the property with someone they don t know or with whom they don t agree the heir may file a partition action forcing the unwilling tenants to sell or divide the property facilitates property purchasesthe number of tenants can changedifferent degrees of ownership are possibleno automatic survivorship rightsall tenants are equally liable for debt and taxesone tenant can force the sale of propertyexample of tenancy in commoncalifornia allows four types of ownership that include community property partnership joint tenancy and tenancy in common tic is the default form among unmarried parties or other individuals who jointly acquire property these owners have the status of tenants in common unless their agreement or contract expressly otherwise states that the arrangement is a partnership or a joint tenancy tic is one of the most common types of homeownership in san francisco according to sirkinlaw a san francisco real estate law firm specializing in co ownership tic conversions have become increasingly popular in other parts of california too including oakland berkeley santa monica hollywood laguna beach san diego and throughout marin and sonoma counties | |
what benefit does tenancy in common provide | tenancy in common tic is a legal arrangement in which two or more parties jointly own a piece of real property such as a building or parcel of land the key feature of a tic is that a party can sell their share of the property while also reserving the right to pass on their share to their heirs | |
what happens when one of the tenants in common dies | the ownership share of the deceased tenant is passed on to that tenant s estate and handled according to provisions in the deceased tenant s will or other estate plan any surviving tenants would continue owning and occupying their shares of the property | |
what is a common dispute among tenants in common | tic tenants share equal rights to use the entire property regardless of their ownership percentage maintenance and care are divided evenly despite ownership share problems can arise when a minority owner overuses or misuses the property the bottom linetenancy in common is one of three types of ownership where two or more parties share interest in real estate or land owners as tenants in common share interests and privileges in all areas of the property regardless of each tenant s financial or proportional share a tenancy in common doesn t carry rights of survivorship so one tenant s ownership doesn t automatically pass to the other tenants if one of them dies | |
what are tenants by entirety tbe | tenants by entirety tbe is a method in some states by which married couples can hold the title to a property in order for one spouse to modify his or her interest in the property in any way the consent of both spouses is required by tenants by entirety it also provides that when one spouse passes away the surviving spouse gains full ownership of the property understanding tenants by entirety tbe for example a husband could not decide to sell his ownership interest in a vacation home owned by his wife without the wife s consent about half of the u s states allow tenancy by entirety for all types of property property can include real estate bank and other financial accounts and even business property a handful of states allow it only for real estate other possible structures under which spouses may choose to jointly own property include tenancy in common and joint tenancy each method of holding title affects each owner s rights to transfer the property and use it as collateral the ownership structure also determines what will happen to the property when one spouse dies and whether the property can be used to satisfy a debt or judgment | |
how tenants by entirety are viewed from a legal perspective | property that is held by tenants by entirety is comparable to community property both spouses mutually own the entire property as a whole rather than any type of subdivision where each would have individual ownership one key distinction however relates to a creditor s ability to attach property in order to collect on a debt tenants by entirety precludes creditor s from attaching the property of an individual debtor only in cases where both the husband and wife are parties to the debt can the property be attached this is not the case with community property regardless of who owes the debt community property can be attached in addition federal tax liens against one spouse could in some circumstances be attached to property that is covered by tenants by entirety and potentially subject to seizurethe rights of tenants by entirety can supersede the terms laid out in a will or trust that might otherwise grant property to heirs upon the death of one of the spouses for example the will left by a deceased party might state they want one of their surviving children to take possession of a piece of property if that property is jointly owned by the decedent s spouse and falls under the terms of tenants by entirety the terms of the will may be ignored the surviving spouse would retain sole ownership of the property a tenancy by entirety can be eliminated under such circumstances as a divorce which would see the property divided between the parties or a voluntary mutually sought petition by both parties to change the nature of ownership | |
what is a tender | a tender is an invitation to bid for a project tendering usually refers to the process whereby governments and financial institutions invite bids for large projects that must be submitted within a finite deadline the word tender can also refer to the acceptance of a formal offer such as a takeover bid this form of tendering is the process whereby shareholders submit their shares or securities in response to a takeover offer investopedia laura porter | |
how a tender works | as noted above a tender is a term used in business to refer to an invitation by governments and other entities to submit a bid for contracts most institutions have a well defined tender process for projects or procurements there are also specific processes in place to govern the opening evaluation and final selection of the vendors this ensures that the selection process is fair and transparent a request for tender is a formal and structured invitation to suppliers to submit competitive bids to supply raw materials products or services because this is a public and open process laws were created to govern the process to ensure fair competition among bidders 12for example without laws bribery and nepotism may flourish tender services are available for potential bidders and include a wide range of tenders from private and public sources these services include crafting suitable bids coordinating the process to ensure deadlines are met and ensuring compliance with applicable laws in the private sector requests for tenders are referred to as requests for proposals rfps this allows potential bidders to respond to the defined needs of the issuer tender vs tender offer | |
don t confuse the term tender with a tender offer which most people often do the latter is a public solicitation to all shareholders requesting that they tender their stock for sale at a specific price during a certain time to entice shareholders to release a specific number of shares the offer typically exceeds the current market value of the shares in the u s tender offers are highly scrutinized and subject to extensive regulation 3 | for example on dec 13 2021 dell dell announced it closed a tender offer to repurchase shares of the company s securities to fund the stock buyback the company used cash on hand along with the net proceeds from the sale of 2 25 billion of senior notes 4since the deal targets shareholders directly it effectively removes upper management from the process unless those members of management are also substantial shareholders if an acquiring company already has a notable share of the target company which is referred to as a foothold block a minority of the remaining shareholders may be enough to allow the offering company to become the majority shareholder if the requested shares are not released by the deadline the deal is often considered void if this happens it effectively allows shareholders to block the deal competitive tender vs non competitive tenderthe terms competitive tender and non competitive tender refer to two different methods governments use to sell government securities in the united states the government sells treasury securities such as bonds bills and notes to help fund the government s operations individual investors commercial banks corporations pension funds brokers and dealers are some of the typical buyers of government securities in exchange for investing in these securities buyers will receive the government s promise of full repayment at maturity along with a specified interest payment there are two ways that investors can purchase government securities through a competitive tender and a non competitive tender a competitive tender is a bidding process in which large institutional investors buy newly issued government securities these institutional investors compete with one another to purchase the securities in an auction the investor that bids the highest will win the auction and can purchase the security at the bid price smaller non institutional investors purchase government securities through a non competitive tender process the price for these securities is set by the large institutional investors during the competitive tender for example when the u s treasury auctions securities to large institutional investors it will use the winning bid to establish the fair market value fmv for its securities it will then use this value to set the price that smaller investors will pay during the non competitive tender the u s treasury issues bonds in a term of 20 years or 30 years and pays a fixed interest rate every six months until they mature 5examples of tenderin the u s many business owners look to expand their businesses by becoming government contractors with federal state or local governments they sell services or goods to governments and a variety of agencies federal agencies that routinely buy from contractors include the defense contract management agency department of energy department of education department of health and human services and department of homeland security 6becoming a contractor requires businesses to compete with one another by presenting proposals and quotes based on the requirements outlined by the government or agency in their invitation to tender this process is also referred to as a call for bids the u s federal government lists contract opportunities in a searchable database that helps business owners match open opportunities with the products or services they offer the database also lists pre solicitation notices solicitation notices and award notices 7 | |
what does tender mean in business and finance | tender can have a couple of different meanings in business in finance the most common definition of the word is the invitation to bid for a project usually a large bid from contractors for projects by governments and financial institutions it may also refer to the acceptance of a formal offer which can include a takeover bid in this case shareholders put up their shares to the offering entity | |
what are some examples of tendering | some of the most common examples of tendering include the submission process by contractors to various levels of government for instance private companies compete with one another to become government contractors the process involves submitting proposals with costs based on the work required government agencies that typically put out calls for proposals are the department of energy department of health and human services and department of homeland security 6 | |
what are the steps to take in the tender process | the tender process steps generally include the call for submissions the bid submission the selection process and the formation of the contract once these steps are all complete the contractor starts the project and sees it through completion | |
what s the difference between tender and tender offer | people often confuse the terms tender and tender offer tender or tendering is mainly defined as the invitation to submit a bid for a project governments and other entities normally put out calls for contractors to submit proposals for projects that need to be done they review these proposals and choose the best one for the job a tender offer on the other hand is made by a public company or third party to purchase shares from another company s shareholders the bidder is the party conducting the tender offer companies can offer to repurchase debt securities or bonds from holders using a debt tender offer the bottom linetender is an often used term in business finance and investing that can have various meanings in a business setting tender refers to the process where governments invite vendors to bid for the right to work on government projects or provide goods or other services | |
what is a tender offer | a tender offer is a bid to purchase some or all of the shareholders stock in a corporation tender offers are typically made publicly and invite shareholders to sell their shares for a specified price and within a particular window of time the price offered is usually at a premium to the market price and is often contingent upon a minimum or a maximum number of shares sold 1to tender is to invite bids for a project or accept a formal offer such as a takeover bid an exchange offer is a specialized type of tender offer in which securities or other non cash alternatives are offered in exchange for shares companies might also offer a debt tender offer to repurchase or retire their outstanding debt and bond securities | |
how a tender offer works | a tender offer often occurs when an investor proposes buying shares from every shareholder of a publicly traded company for a certain price at a certain time the investor normally offers a higher price per share than the company s stock price providing shareholders a greater incentive to sell their shares most tender offers are made at a specified price that represents a significant premium over the current share price a tender offer might for instance be made to purchase outstanding stock shares for 18 a share when the current market price is only 15 a share the reason for offering the premium is to induce a large number of shareholders to sell their shares in the case of a takeover attempt the tender may be conditional on the prospective buyer being able to obtain a certain amount of shares such as a sufficient number of shares to constitute a controlling interest in the company a publicly traded company issues a tender offer with the intent to buy back its own outstanding securities sometimes a privately or publicly traded company executes a tender offer directly to shareholders without the board of directors bod consent resulting in a hostile takeover acquirers include hedge funds private equity firms management led investor groups and other companies the day after the announcement a target company s shares usually trade below or at a discount to the offer price which is attributed to the uncertainty of and time needed for the offer as the closing date nears and issues are resolved the spread typically narrows securities and exchange commission sec laws require any corporation or individual acquiring 5 or more of a company to disclose their stake to the sec the target company and the exchange 1the shares of stock purchased in a tender offer become the property of the purchaser from that point forward the purchaser like any other shareholder has the right to hold or sell the shares at their discretion example of a tender offerfor example company a has a current stock price of 10 per share an investor seeking to gain control of the corporation submits a tender offer of 12 per share with the condition that they acquire at least 51 of the shares in corporate finance a tender offer is often called a takeover bid as the investor seeks to take over control of the corporation advantages of a tender offertender offers provide several advantages to investors for example investors are not obligated to buy shares until a set number is tendered which eliminates large upfront cash outlays and prevents investors from liquidating stock positions if offers fail acquirers can also include escape clauses releasing liability for buying shares for example if the government rejects a proposed acquisition citing antitrust violations the acquirer can refuse to buy tendered shares in many instances investors gain control of target companies in less than one month if shareholders accept their offers they also generally earn more than normal investments in the stock market disadvantages of a tender offeralthough tender offers provide many benefits there are some noted disadvantages a tender offer is an expensive way to complete a hostile takeover as investors pay sec filing fees attorney costs and other fees for specialized services it can be a time consuming process as depository banks verify tendered shares and issue payments on behalf of the investor also if other investors become involved in a hostile takeover the offer price increases and because there are no guarantees the investor may lose money on the deal | |
what is a tenkan sen conversion line | tenkan sen or conversion line is the mid point of the highest and lowest prices of an asset over the last nine periods the tenkan sen is part of a larger indicator called the ichimoku kinko hyo which shows potential support and resistance areas based on different timeframes ichimoku kinko hyo roughly means one look equilibrium chart and is commonly called the ichimoku cloud indicator the ichimoku cloud indicator was developed by japanese journalist goichi hosoda and promoted to the public in 1969 the ichimoku combines a typical candlestick chart with five additional lines that measure price movement and volatility one of those lines is the tenkan sen 1the formula for the tenkan sen conversion line tenkan sen conversion line 9 p h 9 p l 2 where p h period high p l period low begin aligned text tenkan sen conversion line frac 9ph 9pl 2 textbf where ph text period high pl text period low end aligned tenkan sen conversion line 2 9ph 9pl where ph period highpl period low | |
how to calculate the tenkan sen conversion line | understanding the tenkan sen conversion line the tenkan sen shows an asset s short term price momentum on its own it shows the mid point price over the last nine periods due to the very short term nature of the indicator it is not typically used on its own but rather used in conjunction with the other elements of the ichimoku cloud indicator for example if the tenkan sen moves above the kijun sen base line which is the 26 period price midpoint some traders view that as a buy signal conversely if the tenkan sen drops below the kijun sen it may be viewed as a sell signal these signals are also filtered via the cloud a colored part of the indicator that is used to help identify the trend when the price is above the cloud the trend is up and when the price is below the cloud the trend is down if the price is moving within the cloud that often indicates choppy trading or that the trend is in the process of reversing therefore when the price is above the cloud traders may prefer to buy when the tenkan sen crosses above the kijun sen they may also sell that long position when it crosses back below in a downtrend when the price is below the cloud traders may short sell when the tenkan sen crosses below the kijun sen they may cover the short position when the tenkan sen crosses back above the kijun sen the tenkan sen also plays a role in generating senkou span a one of two lines creating the cloud on the ichimoku indicator the edges of the cloud indicate support and resistance points and the thickness of the cloud indicates price volatility as indicated above the cloud also helps identify the trend the tenkan sen conversion line vs a simple moving average sma the tenkan sen is sometimes wrongly confused with a simple moving average sma the tenkan sen is a mid point calculated by adding the nine period high and low and dividing by two this is a different calculation than a sma which would add up the closing prices from the nine periods and then divide the total by nine limitations of using the tenkan sen conversion line the tenkan sen moves closely with the price so it doesn t provide a lot of information on its own except possibly to very short term traders because of this the tenkan sen is typically used in conjunction with other lines in the ichimoku indicator crossover trade signals are sometimes used between the tenkan sen and the kijun sen while these crossover trade signals may produce high profit trades the strategy is also prone to whipsaws this is when crossovers occur but the price fails to move as anticipated resulting in more crossovers and losing trades the tenkan sen is the mid point price of the last nine periods there is nothing inherently predictive in its calculation therefore while it may provide some insight and trade signals traders are well advised to also incorporate other forms of analysis such as price action and other indicators into their strategy as opposed to relying exclusively on the ichimoku indicator and its elements | |
what is tenor | tenor refers to the length of time remaining before a financial contract expires it is sometimes used interchangeably with the term maturity although the terms have distinct meanings tenor is used in relation to bank loans insurance contracts and derivative products understanding tenortenor is often used in relation to bank loans and insurance contracts whereas the term maturity is more often used when describing government bonds and corporate bonds colloquially the two terms have very similar meanings and they may be used interchangeably for different types of financial instruments the term tenor is also used in relation to non standard financial instruments such as derivative contracts in this context it is often used when describing the riskiness of a particular security for instance a futures contract with a long tenor could be said to be relatively risky because there is still significant time in which its value might fall derivatives with shorter tenors would likewise be viewed as less risky as compensation for this perceived risk buyers of high tenor securities will generally require compensation in the form of lower prices or higher risk premiums depending on their risk tolerance and financial objectives some investors may even systematically avoid securities with tenors longer than the specified period for instance a company wishing to manage its short and medium term liquidity needs might buy and sell debt instruments with tenors of five years or less in this context adjustments might be made based on the perceived creditworthiness of the counterparties involved for instance a company might accept a five year tenor for counterparties with high credit ratings while limiting poorly rated counterparties to tenors of three years or less tenor vs maturityfrom a technical perspective tenor and maturity have distinct meanings whereas tenor refers to the length of time remaining in a contract maturity refers to the agreed upon end date of the agreement upon its inception for example if a 10 year government bond was issued five years ago then its maturity would be 10 years and its tenor the time remaining until the end of the contract would be five years in this manner the tenor of a financial instrument declines over time whereas its maturity remains constant example of tenoralex is the chief financial officer cfo of a mid size publicly traded corporation as part of their portfolio of responsibilities they must ensure that the company has adequate working capital to carry out its operations to that end alex buys and sells short and medium term financial instruments with tenors ranging between one and five years they do so in the corporate bond market as well as through over the counter derivative transactions with various counterparties currently alex s portfolio includes several instruments from highly creditworthy counterparties with maturities of five years because they were purchased three years ago these securities have tenors of two years their portfolio also includes instruments from counterparties with weaker credit ratings for these instruments they limit their maximum tenor to three years in order to manage their counterparty risk special considerationstenor is particularly important in a credit default swap because it coordinates the term remaining on the contract with the maturity of the underlying asset a properly structured credit default swap must match the maturity between contract and asset 1 if there is a mismatch between the tenor and the asset s maturity then integration is not likely furthermore coordination between cash flows and subsequent calculation of yield is only possible when tenor and asset maturity are linked | |
what does tenor mean | tenor refers to the length of time remaining before a financial contract expires it is often used interchangeably with the term maturity | |
what is tenor in banking | tenor in regards to banking refers to the length of time that will be taken by the borrower to repay the loan along with the interest generally a home loan tenure may be from 5 20 years with some banks allowing up to 25 years | |
what is maximum tenor | the loan tenor is typically between 5 and 25 years with a maximum of 30 years depending on the type of project and its debt servicing capability | |
what is tenor basis risk | tenor basis risk is the risk that arises when a basis swap occurs despite re pricing on the same date being in the same currency and being linked to the same benchmark problems could arise when they re price if they do so for different periods or tenors the bottom lineunderstanding the tenor of any financial instruments a company may hold such as a short or long term derivative is crucial to maintaining a steady cash flow and analyzing a contract s riskiness correction april 10 2024 this article has been edited from a previous version that incorrectly defined maturity as the initial length of a contract upon its inception maturity refers to the date when a transaction or investment ends | |
what is a term deposit | a term deposit is a fixed term investment that includes the deposit of money into an account at a financial institution term deposit investments usually carry short term maturities ranging from one month to a few years and will have varying levels of required minimum deposits the investor must understand when buying a term deposit that they can withdraw their funds only after the term ends in some cases the account holder may allow the investor early termination or withdrawal if they give several days notification also there will be a penalty assessed for early termination examples of term deposits include certificates of deposit cds and time deposits investopedia theresa chiechiterm deposit explained | |
when an account holder deposits funds at a bank the bank can use that money to lend to other consumers or businesses in return for the right to use these funds for lending they will pay the depositor compensation in the form of interest on the account balance 1 with most deposit accounts of this nature the owner may withdraw their money at any time this makes it difficult for the bank to know ahead of time how much they may lend at any given time | to overcome this problem banks offer term deposit accounts a customer will deposit or invest in one of these accounts agreeing not to withdraw their funds for a fixed period in return for a higher rate of interest paid on the account the interest earned on a term deposit account is slightly higher than that paid on standard savings or interest bearing checking accounts 2 the increased rate is because access to the money is limited for the timeframe of the term deposit term deposits are an extremely safe investment and are therefore very appealing to conservative low risk investors the financial instruments are sold by banks thrift institutions and credit unions term deposits sold by banks are insured by the federal deposit insurance corporation fdic 3 the national credit union administration ncua provides coverage for those sold by credit unions 4 | |
how a bank uses a term deposit | if a customer places money in a term deposit the bank can invest the money in other financial products that pay a higher rate of return ror than what the bank is paying the customer for the use of their funds the bank can also lend the money out to its other clients thereby receiving a higher interest rate from the borrowers as compared to what the bank is paying in interest for the term deposit for example a lender may offer a 2 rate for term deposits with a two year maturity the funds deposited are then structured as loans to borrowers who are charged 7 in interest on those notes this difference in rates means that the bank makes a net 5 return the spread between the rate the bank pays its customers for deposits and the rate it charges its borrowers is called net interest margin net interest margin is a profitability metric for banks banks are businesses as such they want to pay the lowest rate possible for term deposits and charge a much higher rate to borrowers for loans this practice increases their margins or profitability however there is a balance the bank needs to maintain if it pays too little interest it won t attract new investors into the term deposit accounts also if they charge too high of a rate on loans it won t attract new borrowers term deposits and interest ratesin periods of rising interest rates consumers are more likely to purchase term deposits since the increased cost of borrowing makes savings more attractive also with higher market interest rates the financial institution will need to offer the investor a higher rate of interest so the investor also earns more | |
when interest rates decrease consumers are encouraged to borrow and spend more thereby stimulating the economy in a low interest rate environment demand for term deposits can decrease since investors can typically find alternative investment vehicles that pay a higher rate | typically interest rates should be proportional to the time until maturity and the minimum amount of principal lent to the credit union or bank in other words a six month term deposit will likely pay a lower interest rate than a two year term deposit investors not only receive a higher rate for locking up their money with the bank for extended periods but also should earn a higher rate for large deposits for example a jumbo cd which is a term deposit above 100 000 will receive a higher interest rate than a 1 000 cd opening or closing a term depositterm deposits are also called certificates of deposits customers can view the conditions of the term deposit via a paper statement this statement includes the required minimum principal amount the interest rate paid and the duration or time to maturity as agreed by the bank and the depositor if a customer wants to close a term deposit before the end of the term or maturity the customer will be subject to a penalty this penalty may include the loss of any interest paid on the deposit account until that point closing the cd before the term ends lets the customer take back the principal amount invested but with the forfeiture of the earned interest the penalty for withdrawing prematurely or against the agreement is stated at the time of opening a term deposit as required by the truth in savings act 5sometimes if interest rates have risen considerably it might be worth it for a customer to close the term deposit early take the penalty for the early withdrawal and reinvest the funds elsewhere at a higher rate it s important to be sure that the alternative rate is high enough to more than compensate for the original rate on the term deposit plus the cost of the penalty | |
when a term deposit is nearing its maturity date the bank holding the deposit will usually send a letter notifying the customer of the upcoming maturity in the letter the bank will ask if the customer wants the deposit renewed again for the same length to maturity 6 the rollover will likely be at a different rate based on the market interest rate at that time alternatively the customer has the option of placing the funds in another financial product | investors holding retirement cds should speak to a financial planner or tax advisor who can explain the different regulations involved in early withdrawal from these investments inflation and term depositsunfortunately term deposits do not keep up with inflation the inflation rate is a measure of how much prices rise in a given year if the rate on a term deposit is 2 and the inflation rate in the u s is 2 5 theoretically the customer is not earning enough to compensate for price increases in the economy laddering strategyrather than investing a large lump sum into one term deposit an investor may use a strategy that spreads out the funds between several cds this strategy for investing using term deposits is to distribute an investment evenly over a set number of years with maturities coming at regular intervals this laddering investment strategy locks in the interest rates with the cds at longer terms having higher rates than those with shorter terms as the cds mature the customer can choose to use the money for income by withdrawing the funds or roll those funds into another cd to continue the ladder the method allows the investor to have access to funds as they mature for example an investor can deposit 3 000 each into a five four three two and one year term deposit one of the cds matures each year which allows the customer to either withdraw the money for expenses or roll the funds into a new account the new term deposit will have a rate based on the current market rate this method is popular for retirees who need to withdraw a set amount of income each year from their savings to pay for living expenses the strategy can be used while investing with the same credit union or bank or across several different institutions the investor can either withdraw the principal and interest upon maturity or reinvest the funds if they are not needed term deposits offer a fixed rate of interest over the life of the investment term deposits are risk free safe investments since they re either backed by the fdic or the ncua various maturities allow investors to stagger end dates to create an investment ladder term deposits have a low minimum deposit amount term deposits pay higher rates for larger initial deposit amounts interest rates paid on term deposits are typically lower or less attractive than most fixed rate investments term deposits can t be withdrawn early without penalty or losing all of the interest earned interest rates don t keep up with rising inflation interest rate risk exists if investors are locked in a low rate term deposit while overall interest rates are rising example of term depositswells fargo bank wfc is one of the largest consumer banks in the u s and offers several types of term deposits below are a few of the bank s cds along with the interest rates paid to depositors as of june 10 2024 7please note that the interest rates being offered by the bank can change anytime for new cds and might be different depending on the state in which the branch is located | |
what is term life insurance | term life insurance provides a death benefit that pays the beneficiaries of the policyholder throughout a specified period of time once the term expires the policyholder can either renew it for another term possibly convert the policy to permanent coverage or allow the term life insurance policy to lapse investopedia madelyn goodnihgt | |
when you buy a term life insurance policy the insurance company determines the premium based on the policy s value the payout amount and such factors as your age gender and health other considerations affecting rates include the company s business expenses how much it earns from its investments and mortality rates for each age 2 | in some cases a medical exam may be required the insurance company may also inquire about your driving record current medications smoking status occupation hobbies family history and similar information if you die during the policy term the insurer will pay the policy s face value to your beneficiaries this cash benefit which is not typically taxable may be used by beneficiaries to settle your healthcare and funeral costs consumer debt mortgage debt and other expenses 3 however beneficiaries are not required to use the insurance proceeds to settle the deceased s debts if the policy expires before your death or you live beyond the policy term there is no payout you may be able to renew a term policy at expiration but the premiums will be recalculated based on your age at the time of renewal term life is usually the least costly life insurance available because it offers a death benefit for a restricted time and doesn t have a cash value component like permanent insurance has for example data from insureon shows that a healthy non smoking man aged 30 could get a 30 year term life insurance policy with a 500 000 death benefit for an average of 30 per month as of february 2023 at age 50 the premium would rise to 138 a month in contrast here s a look at rates for a 500 000 whole life policy which is a type of permanent policy meaning it lasts your lifetime and includes cash value as you can see the same 30 year old healthy male would pay an average of 282 a month at 50 he d pay 571 most term life insurance policies expire without paying a death benefit that lowers the overall risk to the insurer compared to a permanent life policy the reduced risk is one factor that allows insurers to charge lower premiums interest rates the financials of the insurance company and state regulations can also affect premiums in general companies often offer better rates at the breakpoint coverage levels of 100 000 250 000 500 000 and 1 000 000 | |
when you consider the amount of coverage you can get for your premium dollars term life insurance tends to be the least expensive life insurance check our recommendations for the best term life insurance policies when you are ready to buy | example of term life insurancethirty year old george wants to protect his family in the unlikely event of his early death he buys a 10 year 500 000 term life insurance policy with a premium of 50 per month if george dies within the 10 year term the policy will pay george s beneficiary 500 000 if he dies after the policy has expired his beneficiary will receive no benefit if he remains alive and renews the policy after 10 years the premiums will be higher than his initial policy because they will be based on his current age of 40 rather than 30 if george is diagnosed with a terminal illness during the first policy term he probably will not be eligible to renew the policy when it expires some policies do offer guaranteed re insurability without proof of insurability but such features come with a higher cost types of term life insurancethere are several types of term life insurance the best option will depend on your individual circumstances generally most companies offer terms ranging from 10 to 30 years although a few offer 35 and 40 year terms level premium insurance has a fixed monthly payment for the life of the policy most term life insurance has a level premium and it s the type we ve been referring to in most of this article as we mentioned before this type of policy generally provides coverage for a period ranging from 10 to 30 years the death benefit is also fixed because actuaries must account for the increasing costs of insurance over the life of the policy s effectiveness the level premium is comparatively higher than yearly renewable term life insurance 4yearly renewable term yrt policies are one year policies that can be renewed each year without providing evidence of insurability the premiums rise from year to year as the insured person ages thus the premiums can become prohibitively expensive as the policyholder ages but they may be a good option for someone who needs temporary insurance these policies have a death benefit that declines each year according to a predetermined schedule the policyholder pays a fixed level premium for the duration of the policy 5decreasing term policies are often used in concert with a mortgage with the policyholder matching the payout of the insurance to the declining principal of the home loan benefits of term life insuranceterm life insurance is attractive to young people with children parents can obtain substantial coverage for a low cost and if the insured dies while the policy is in effect the family can rely on the death benefit to replace lost income these policies are also well suited for people with growing families they can maintain coverage needed until for example their children reach adulthood and become self sufficient the term life benefit may be equally useful to an older surviving spouse however premiums for people who wait until they are older to apply for insurance will pay higher premiums than if they d gotten a level term policy when they were younger each insurance company sets a maximum age for their term life insurance coverage this usually ranges from about 80 to 90 years old term life insurance vs permanent life insurancethe main differences between a term life insurance policy and a permanent insurance policy such as whole life or universal life insurance are the duration of the policy the accumulation of a cash value and the cost the right choice for you will depend on your needs here are some things to consider term life policies are ideal for people who want substantial coverage at a low cost people who own whole life insurance pay more in premiums for less coverage but have the security of knowing they are protected for life people who buy term life pay premiums for an extended period but they get nothing in return unless they have the misfortune to die before the term expires plus term life insurance premiums increase with age unless a term policy is a is guaranteed renewable the company could refuse to renew coverage at the end of a policy s term if the policyholder develops a severe illness permanent insurance provides coverage for life as long as the premiums are paid regardless of changes in the insured s health some customers prefer permanent life insurance because the policies typically contain an investment or savings vehicle a portion of each premium payment is allocated to the cash value which usually grows while the policy remains in force some plans pay dividends which can be paid out in cash or left on deposit within the policy over time the cash value may grow large enough to pay the premiums on the policy there are also several unique tax benefits such as tax deferred cash value growth and tax free access to the cash portion but financial advisors warn that the growth rate of a policy with cash value is often paltry compared to other financial instruments such as mutual funds and exchange traded funds etfs also substantial administrative fees often cut into the rate of return this is the source of the phrase buy term and invest the difference however the performance of permanent insurance can be steady and it is tax advantaged providing additional benefits when the stock market is volatile there is no one size fits all answer to the term versus permanent insurance debate other factors to consider include term life insurance vs convertible term life insuranceconvertible term life insurance is a term life policy that includes a conversion rider the rider guarantees the right to convert an in force term policy or one about to expire to a permanent plan without going through underwriting or proving insurability the conversion rider should allow you to convert to any permanent policy the insurance company offers with no restrictions 6the primary features of the rider are maintaining the original health rating of the term policy upon conversion even if you later have health issues or become uninsurable and deciding when and how much of the coverage to convert the basis for the premium of the new permanent policy is your age at conversion of course overall premiums will increase significantly since whole life insurance is more expensive than term life insurance the advantage is the guaranteed approval without a medical exam medical conditions that develop during the term life period cannot cause premiums to be increased however the company may require limited or full underwriting if you want to add additional riders to the new policy such as a long term care rider | |
which is better term life insurance or whole life insurance | it depends on your family s needs term life insurance is a relatively inexpensive way to provide a lump sum to your dependents if something happens to you if you are young and healthy and you support a family it can be a good option whole life insurance comes with substantially higher monthly premiums it is meant to provide coverage for as long as you live as the coverage matures the policy grows in value and the policyholder can make withdrawals for any purpose thus it can serve as an investment product as well as an insurance policy | |
do you get your money back at the end of a term life insurance policy | if you re alive when the term expires you get nothing back from your term life insurance policy the death benefit is only payable to your beneficiaries if you die that is the reason why term life insurance is relatively inexpensive most people outlive their term life insurance policies can a senior citizen get term life insurance it depends on their age insurance companies seta maximum age limit for term life insurance policies this is usually 80 to 90 years old but may be higher or lower depending on the company the premium also rises with age so a person aged 60 or 70 will pay substantially more than someone decades younger the bottom lineterm life insurance is a good option for people who can t or won t pay the much higher monthly premiums associated with whole life insurance term life is somewhat similar to car insurance it s statistically unlikely that you ll need it and the premiums are money down the drain if you don t but if the worst happens your family will receive the benefits | |
what is a term loan | a term loan provides borrowers with a lump sum of cash upfront in exchange for specific borrowing terms term loans are normally meant for established small businesses with sound financial statements in exchange for a specified amount of cash the borrower agrees to a certain repayment schedule with a fixed or floating interest rate term loans may require substantial down payments to reduce the payment amounts and the total cost of the loan understanding term loansterm loans are commonly granted to small businesses that need cash to purchase equipment a new building for their production processes or any other fixed assets to keep their businesses going some businesses borrow the cash they need to operate on a month to month basis many banks have established term loan programs specifically to help companies in this way business owners apply for term loans the same way they would any other credit facility by approaching their lender they must provide statements and other financial evidence demonstrating their creditworthiness 1 approved borrowers get a lump sum of cash and are required to make payments over a certain period of time usually on a monthly or quarterly repayment schedule term loans carry a fixed or variable interest rate and a set maturity date if the proceeds are used to finance the purchase of an asset the useful life of that asset can impact the repayment schedule the loan requires collateral and a rigorous approval process to reduce the risk of default or failure to make payments as noted above some lenders may require down payments before they advance the loan borrowers often choose term loans for several reasons including taking out a term loan also frees up cash from a company s cash flow in order to use it elsewhere variable rate term loans are based on a benchmark rate like the u s prime rate or the london interbank offered rate libor types of term loansterm loans come in several varieties usually reflecting the lifespan of the loan these include both short and intermediate term loans may also be balloon loans and come with balloon payments this means the final installment swells or balloons into a much larger amount than any of the previous ones while the principal of a term loan is not technically due until maturity most term loans operate on a specified schedule requiring a specific payment size at certain intervals example of a term loana small business administration sba loan officially known as a 7 a guaranteed loan encourages long term financing short term loans and revolving credit lines are also available to help with a company s immediate and cyclical working capital needs 1maturities for long term loans vary according to the ability to repay the purpose of the loan and the useful life of the financed asset maximum maturity dates are generally 25 years for real estate up to 10 years for working capital and 10 years for most other loans the borrower repays the loan with monthly principal and interest payments 3as with any loan an sba fixed rate loan payment remains the same because the interest rate is constant conversely a variable rate loan s payment amount can vary since the interest rate fluctuates a lender may establish an sba loan with interest only payments during a company s startup or expansion phase as a result the business has time to generate income before making full loan payments most sba loans do not allow balloon payments the sba charges the borrower a prepayment fee only if the loan has a maturity of 15 years or longer business and personal assets secure every loan until the recovery value equals the loan amount or until the borrower has pledged all assets as reasonably available 4 | |
why do businesses get term loans | a term loan is usually meant for equipment real estate or working capital paid off between one and 25 years a small business often uses the cash from a term loan to purchase fixed assets such as equipment or a new building for its production process some businesses borrow the cash they need to operate from month to month many banks have established term loan programs specifically to help companies in this way | |
what are the types of term loans | term loans come in several varieties usually reflecting the lifespan of the loan a short term loan usually offered to firms that don t qualify for a line of credit generally runs less than a year though it can also refer to a loan of up to 18 months or so 2 an intermediate term loan generally runs more than one to three years and is paid in monthly installments from a company s cash flow a long term loan runs for three to 25 years uses company assets as collateral and requires monthly or quarterly payments from profits or cash flow | |
what are the common attributes of term loans | term loans carry a fixed or variable interest rate a monthly or quarterly repayment schedule and a set maturity date if the loan is used to finance an asset purchase the useful life of that asset can impact the repayment schedule the loan requires collateral and a rigorous approval process to reduce the risk of default or failure to make payments however term loans generally carry no penalties if they are paid off ahead of schedule | |
a term sheet is a nonbinding agreement that shows the basic terms and conditions of an investment it is a template and basis for more detailed legally binding documents once the parties involved reach an agreement on the details laid out in the term sheet a contract that conforms to the term sheet details is drawn up | uses of a term sheetthe term sheet should cover the significant aspects of a deal without detailing every minor contingency covered by a binding contract this helps ensure the parties in a business transaction agree on most major aspects while reducing the likelihood of a misunderstanding this in turn could avoid costly legal challenges later on all term sheets contain information on the assets the initial purchase price any contingencies that may affect the cost a time frame for a response and other important information term sheets are most often associated with startups entrepreneurs find this document crucial for investors often vcs who may offer capital to fund startups a term sheet used as part of a merger or attempted acquisition typically contains information about the initial purchase price the preferred payment method and the assets included it might also have information about what if anything is excluded from or must be part of the deal for one or both parties | |
what s included in a term sheet | the details in a term sheet depend on what s being agreed to for an angel investment the early funding investment term sheet will be substantially different from what s included in one for a commercial real estate development generally though there are standard details included for debt agreements here is what s commonly included a term sheet may be signed by both parties to formally signify that each side has agreed to the terms and that each team s legal council may proceed with drafting a formal agreement terms found in a term sheetterm sheets often have standardized language here are some specific terms discussed in two different types of term sheets dividends investors may want clarity on what net income distributions they will be entitled to in addition to clarifying the dollar amounts investors may want to know the timing i e monthly quarterly or annually drag along clause investors may want guarantees that minority stakeholders will follow the guidance of majority stakeholders liquidation preference investors may want to know the order in which owners are paid if the company gets sold this reduces the risk to investors no shop agreement this outlines the terms that restrict the company from taking investment money from other people for a specific period pro rata rights investors may want to better understand their rights for future investing rounds for example depending on their present investment they may be entitled to the right of first offer for an investment offering in the future meanwhile there may be penalties for investors who decide not to participate in future investment rounds valuation pre money and post money investors might want the pre money and post money valuations done before an official investment agreement is drafted valuation cap this is the value at which convertible notes can be converted into equity often a crucial point in negotiations this figure should be discussed early between the parties to ensure a fair starting point for the startup s valuation and to protect the investor voting rights investors may be interested in what they say they have over the company s operations this may be an agreement on the number of votes the investor receives or any restrictions on matters about which they aren t eligible to vote collateral borrowers may have to post collateral to substantiate value in case of default this is often the underlying asset the debt supports and the lender may require the first deed of trust financial covenants borrowers may need to prove financial health to the lender this includes providing certified financial statements guarantee statements or other records following the agreed upon covenants with the lender guarantee borrowers may need to identify a legal entity with established credit to vouch for the debt and be liable if the company defaults interest rate depending on the loan terms may vary widely the interest rate may include a fixed spread rate plus a variable rate for long term loans for example it might be a one month term with a secured overnight financing rate sofr the latter is a benchmark interest rate for dollar denominated derivatives and loans which reflects the cost of borrowing cash overnight collateralized by treasury securities loan amount borrowers need a specific amount of funds to borrow this term may be a fixed dollar amount subject to loan to value metrics a debt service coverage ratio and net operating income calculations loan costs besides interest a lender may require an annual administration fee or a one time closing fee these expenses can be significant for bigger loans and borrowers should review upfront costs before loan proceeds are distributed term borrowers must know when the loan is fully payable for open lines of credit or development loans this is the period during which interest is assessed but principal payments may not be due tips for writing a term sheetevery term sheet will vary as the parties conditions and agreement will rarely be repeated still here are broad tips for drafting a term sheet that applies to almost every situation summarize the conditions at the beginning of the term sheet draft a summary identifying the agreement s overall purpose and the intended outcome this includes explicitly addressing the project e g seed a funding of company xyz or residential development of 254 units in los angeles ca identify each legal party involved state binding non binding terms a term sheet should explicitly state whether the agreement is binding or nonbinding this is often noted early in the term sheet list the terms understand that a term sheet is the first formal information the opposing party may receive while the term sheet should not include the complete list of details in the agreement it should provide enough information to entice the other party without overwhelming them cover the most important aspects of the deal with the understanding that minor details can be sorted out later state the time frames even if the term sheet is nonbinding it should include an expiration date that requires the opposing party to take action by a specific time this encourages participation and action on the term letter and ensures the terms are not stale or unfavorable if held open too long encourage feedback consider distributing a digital version of the term sheet that tracks changes ideally the first draft would be a complete meeting of the minds with no further changes needed realistically this is rare ensure the other party tracks any changes allowing each side to quickly identify areas not yet in agreement a company will often solicit many term sheets and compare the terms across bidders it will then move forward with the term sheet that is most favorable though it may decide to negotiate with others too documents similar to term sheetsterm sheets are like many other documents so it s important to understand the differences a letter of intent loi is a document that declares a preliminary commitment by one party to work with another these are common in business transactions where one company announces its intention to do business with a second company a term sheet is often like an loi when the action is one sided as in acquisitions or a working document to serve as a jumping off point for more intensive negotiations the main difference between an loi and a term sheet is stylistic the former is written as a formal letter while the latter comprises bullet points outlining the terms memorandums of understanding mous outline agreements between two or more people or organizations in a formal document mous are not necessarily legally binding but show that all parties are willing to move forward with a contract they often serve as the starting point for contract negotiations or mergers although term sheets are distinct from lois and mous the three documents are often referred to interchangeably because they accomplish similar goals and contain similar information example of a term sheetin 2024 the new york city department of housing preservation development released a term sheet for its homefirst down payment assistance program 1 the program is intended to help low income people buy owner occupied homes by offering forgivable loans to use toward a down payment the term sheet outlines which entities are eligible for the program what home types qualify the loan amount loan terms as well as construction requirements at the end of the term sheet the department s contact information is shown so interested parties who agree to these terms can communicate with the nyc office of development | |
how important is legal counsel when creating or reviewing a term sheet | legal counsel is essential when creating or reviewing a term sheet to ensure that the terms are clear fair and protect your interests an experienced attorney can help identify potential issues and provide valuable negotiation advice who prepares a term sheet depending on the financial instrument different parties may be the one to prepare the term sheet for seed round investments investors often provide a term sheet when offering their private investment for loans lending institution will often provide a term sheet to prospective borrowers | |
is a term sheet legally binding | term sheets evidence serious intent but are generally not legally binding 2 a company may sign a term sheet to agree to the terms of the instrument however for example a separate loan agreement must be signed to be legally binding a company is not under contract for the loan even if it agrees to a term sheet | |
what are the common pitfalls to avoid when drafting a term sheet | common pitfalls include being too vague or overly detailed failing to clearly distinguish between binding and nonbinding terms not setting realistic time frames and neglecting to outline key financial terms and conditions the bottom linea term sheet is a document that evidences serious intent between two parties that often signals the beginning of a transaction it s the first step for the two parties working on structuring a deal though term sheets are usually not binding they may require a good faith deposit in escrow indicating serious effort toward a future deal | |
what is the term structure of interest rates | the term structure of interest rates commonly known as the yield curve depicts the interest rates of similar quality bonds at different maturities investopedia julie bangunderstanding term structure of interest ratesessentially term structure of interest rates is the relationship between interest rates or bond yields and different terms or maturities when graphed the term structure of interest rates is known as a yield curve and it plays a crucial role in identifying the current state of an economy the term structure of interest rates reflects the expectations of market participants about future changes in interest rates and their assessment of monetary policy conditions in general terms yields increase in line with maturity giving rise to an upward sloping or normal yield curve the yield curve is primarily used to illustrate the term structure of interest rates for standard u s government issued securities this is important as it is a gauge of the debt market s feeling about risk one commonly used yield curve compares the three month two year five year 10 year and 30 year u s treasury debt yield curve rates are usually available at the treasury s interest rate website by 6 00 p m eastern standard time each trading day 1the term of the structure of interest rates has three primary shapes the u s treasury yield curvethe u s treasury yield curve is considered to be the benchmark for the credit market because it reports the yields of risk free fixed income investments across a range of maturities in the credit market banks and lenders use this benchmark as a gauge for determining lending and savings rates yields along the u s treasury yield curve are primarily influenced by the federal reserve s federal funds rate other yield curves can also be developed based upon a comparison of credit investments with similar risk characteristics most often the treasury yield curve is upward sloping one basic explanation for this phenomenon is that investors demand higher interest rates for longer term investments as compensation for investing their money in longer duration investments occasionally long term yields may fall below short term yields creating an inverted yield curve that is generally regarded as a harbinger of recession the outlook for the overall credit marketthe term structure of interest rates and the direction of the yield curve can be used to judge the overall credit market environment a flattening of the yield curve means longer term rates are falling in comparison to short term rates which could have implications for a recession when short term rates begin to exceed long term rates the yield curve is inverted and a recession is likely occurring or approaching | |
what is term to maturity | a bond s term to maturity is the length of time during which the owner will receive interest payments on the investment when the bond reaches maturity the principal is repaid bonds can be grouped into three broad categories depending on their terms to maturity short term bonds of one to three years intermediate term bonds of four to 10 years and long term bonds of 10 to 30 years 1understanding term to maturitygenerally the longer the term to maturity is the higher the interest rate on the bond will be and the less volatile its price will be on the secondary bond market also the further a bond is from its maturity date the larger the difference between its purchase price and its redemption value which is also referred to as its principal par or face value the interest rate on long term bonds is higher to compensate for the interest rate risk the investor is taking on the investor is locking in money for the long run with the risk of missing out on a better return if interest rates go higher the investor will be forced to forego the higher return or sell the bond at a loss in order to reinvest the money at a higher rate the term to maturity is one factor in the interest rate paid on a bond the longer the term the higher the return a short term bond pays relatively less interest but the investor gains flexibility the money will be repaid in a year or less and can be invested at a new higher rate of return 1in the secondary market a bond s value is based on its remaining yield to maturity as well as its face or par value for many bonds the term to maturity is fixed however the term to maturity can be changed if the bond has a call provision a put provision or a conversion provision an example of term to maturitythe walt disney company raised 7 billion by selling bonds in september 2019 the company issued new bonds with six terms of maturity in short term medium term and long term versions the long term version was a 30 year bond that pays 0 95 more than the comparable treasury bonds | |
what is the terminal capitalization rate | the terminal capitalization rate also known as the exit rate is the rate used to estimate the resale value of a property at the end of the holding period the expected net operating income noi per year is divided by the terminal cap rate expressed as a percentage to get the terminal value terminal capitalization rates are estimated based on comparable transaction data or what is believed to be appropriate for a particular property s location and attributes understanding the terminal capitalization ratethe going in cap rate is the projected first year noi divided by the initial investment or purchase price in contrast the terminal capitalization rate is the projected noi of the last year exit year divided by the sale price if this rate is lower than the going in cap rate it usually means that the property investment was profitable most real estate investing professionals agree that it s important to match the terminal capitalization rate to the current rate of the market keeping in mind that it may be a safer test for the development to nudge the terminal cap rate up a bit a dynamic spreadsheet can be useful to stress test the development project to establish the highest terminal capitalization rate that would still provide a sufficient upside to investors savvy real estate investors look for markets and property types for which market capitalization rates are expected to fall since a lower terminal capitalization rate compared to the going in cap rate will result in capital gains assuming that the noi will not decrease over the holding period some of the data that must be considered includes supply and demand metrics for each category of space as well as for the services and expenses assumed to be related to each area of operation while the future is always uncertain two things are certain about the end of any holding period the buildings will age and the markets will change it s thus critical that all real estate investors compile and analyze as much data as possible to accurately pinpoint a terminal capitalization rate for a project example of the terminal capitalization ratean investor buys a fully occupied property for 100 million first year noi is estimated at 5 0 million the going in cap rate is therefore 5 0 seven years later the investor believes that the terminal capitalization rate is approximately 4 0 last year noi which has taken into account rent escalation along the way is projected at 5 5 million again assuming full occupancy the resale value is estimated at 137 5 million 5 5 million in noi divided by the 4 0 terminal capitalization or exit rate | |
what is terminal value tv | terminal value tv is the value of an asset business or project beyond the forecasted period when future cash flows can be estimated terminal value assumes a business will grow at a set growth rate forever after the forecast period terminal value often comprises a large percentage of the total assessed value investopedia theresa chiechiunderstanding terminal valueforecasting gets murkier as the time horizon grows longer this holds true in finance as well especially when it comes to estimating a company s cash flows well into the future at the same time businesses need to be valued to solve this analysts use financial models such as discounted cash flow dcf along with certain assumptions to derive the total value of a business or project discounted cash flow dcf is a popular method used in feasibility studies corporate acquisitions and stock market valuation this method is based on the theory that an asset s value equals all future cash flows derived from that asset these cash flows must be discounted to the present value at a discount rate representing the cost of capital such as the interest rate dcf has two major components forecast period and terminal value 1 analysts use a forecast period of about three to five years anything longer than that and the accuracy of the projections suffer this is where calculating terminal value becomes important however this period is often longer for certain industries like those involved in natural resource extraction two commonly used methods to calculate terminal value are perpetual growth gordon growth model and exit multiple the former assumes that a business will continue to generate cash flows at a constant rate forever while the latter assumes that a business will be sold for a multiple of some market metric investment professionals prefer the exit multiple approach while academics favor the perpetual growth model there are several terminal value formulas like discounted cash flow dcf analysis most terminal value formulas project future cash flows to return the present value of a future asset the liquidation value model or exit method requires figuring out the asset s earning power with an appropriate discount rate and then adjusting for the estimated value of outstanding debt the stable perpetuity growth model does not assume the company will be liquidated after the terminal year instead it assumes that cash flows are reinvested and that the firm can grow at a constant rate into perpetuity the multiples approach uses the approximate sales revenues of a company during the last year of a discounted cash flow model then uses a multiple of that figure to arrive at the terminal value without further discounting applied 2the gordon growth model is named after myron gordon an economist at the university of toronto who worked out the basic formula in the late 1950s 3types of terminal valuediscounting is necessary because the time value of money creates a discrepancy between the current and future values of a given sum of money in business valuation free cash flow or dividends can be forecast for a discrete period but the performance of ongoing concerns becomes more challenging to estimate as the projections stretch further into the future moreover it is difficult to determine when a company may cease operations 2to overcome these limitations investors can assume that cash flows will grow at a stable rate forever starting at some point in the future this represents the terminal value terminal value is calculated by dividing the last cash flow forecast by the difference between the discount and terminal growth rates the terminal value calculation estimates the company s value after the forecast period assuming cash flows will grow at a constant rate forever the formula to calculate a firm s terminal value is | |
where | the terminal growth rate is the constant rate at which a company is expected to grow forever 2 this growth rate starts at the end of the last forecasted cash flow period in a discounted cash flow model and goes into perpetuity a terminal growth rate is usually in line with the long term inflation rate but not higher than the historical gross domestic product gdp growth rate if investors assume a finite window of operations there is no need to use the perpetuity growth model instead the terminal value must reflect the net realizable value of a company s assets at that time 1 this often implies that the equity will be acquired by a larger firm and the value of acquisitions are often calculated with exit multiples exit multiples estimate a fair price by multiplying financial statistics such as sales profits or earnings before interest taxes depreciation and amortization ebitda by a factor that is common for recently acquired and similar firms the terminal value formula using the exit multiple method is the most recent metric i e sales ebitda etc multiplied by the decided upon multiple usually an average of recent exit multiples for other transactions 2 investment banks often employ this valuation method but some detractors hesitate to use intrinsic and relative valuation techniques simultaneously terminal value accounts for a significant portion of the total value of a business in a dcf model as it represents the value of all future cash flows beyond the projection period this means that the assumptions made about terminal value can significantly impact the overall valuation of a business terminal value vs net present valueterminal value is not the same as net present value npv terminal value is a financial concept used in discounted cash flow dcf analysis and depreciation to account for the value of an asset at the end of its useful life or of a business past some projection period net present value npv measures the profitability of an investment or project it is calculated by discounting all future cash flows of the investment or project to the present value using a discount rate and then subtracting the initial investment npv is used to determine whether an investment or project is expected to generate positive returns or losses it is a commonly used tool in financial decision making as it helps to evaluate the attractiveness of an investment or project by considering the time value of money | |
why do we need to know the terminal value of a business or asset | most companies do not assume they will stop operations after a few years they expect business to continue forever or at least for a very long time terminal value is an attempt to anticipate a company s future value and apply it to present prices through discounting | |
when evaluating terminal value should i use the perpetuity growth model or the exit approach | in dcf analysis neither the perpetuity growth model nor the exit multiple approach is likely to render a perfectly accurate estimate of terminal value the choice of which method of calculating terminal value to use depends partly on whether an investor wishes to obtain a relatively more optimistic estimate or a relatively more conservative estimate generally speaking using the perpetuity growth model to estimate terminal value renders a higher value investors can benefit from using both terminal value calculations and then using an average of the two values arrived at for a final estimate of npv | |
what does a negative terminal value mean | a negative terminal value would be estimated if the cost of future capital exceeded the assumed growth rate in practice however negative terminal valuations cannot exist for very long a company s equity value can only realistically fall to zero at a minimum and any remaining liabilities would be sorted out in a bankruptcy proceeding whenever an investor comes across a firm with negative net earnings relative to its cost of capital it s probably best to rely on other fundamental tools outside of terminal valuation the bottom lineterminal value is the estimated value of an asset at the end of its useful life it is used for computing depreciation and is also a crucial part of dcf analysis as it accounts for a significant portion of the total value of a business terminal value can be calculated using the perpetual growth method or the exit multiple method terminal value is a crucial part of dcf analysis as it accounts for a significant portion of the total value of a business it is important to carefully consider the assumptions made when calculating terminal value as they can significantly impact a business s overall valuation | |
what is termination of employment | the term termination of employment refers to the end of an employee s work with a company an employee may be terminated from a job of their own free will or following a decision made by the employer employers who execute a termination of employment may do so for a number of reasons including downsizing poor job performance or redundancies an employee who is not actively working because of an illness leave of absence or furlough is still considered employed if the relationship with the employer has not been terminated formally with a notice of termination | |
how voluntary termination works | an employee may voluntarily terminate their employment with a company at any time an individual usually does so when they find a better job with another company retire from the labor force resign to start their own business or when they want to take a break from working voluntary termination may also be a result of constructive dismissal which is also called constructive discharge or constructive dismissal this means that the employee leaves the company because they had no other choice they could have been working under significant duress and difficult working conditions which could include a low salary harassment a new work location that is farther than the employee can reasonably commute and increased work hours among other reasons the forced discharge of an employee whereby they are given an ultimatum to quit or be fired also falls under constructive dismissal if the employee can prove that the employer s actions were unlawful during their tenure they may be entitled to some form of compensation or benefits an employee who voluntarily leaves an employer may be required to hand in their resignation which is an advanced notice either verbally or in writing most industries usually require a two week notice of an employee s termination in some cases the employee gives notice at the time that they terminate or they give no notice at all such as when an employee abandons the job or fails to return to work if your employment changes due to a change in hours lay off or termination you may qualify for cobra health insurance coverage under your existing group health plan for 18 months if you choose to continue under the same plan you are responsible for the full premium each month | |
how involuntary termination works | involuntary termination of employment occurs when an employer lays off dismisses or fires an employee in a layoff employees are usually let go through no fault of their own unlike workers who are fired companies often decide to lay off workers or downsize their organizations to lower their operating costs restructure their organizations or because they no longer need an employee s skill set layoffs may require employers to suspend certain roles temporarily as was the case during the covid 19 pandemic or they may be permanent as a result of restructuring decisions an employee is usually fired from a job as a result of unsatisfactory work performance bad behavior or a poor attitude that does not fit with the corporation s culture they may also be let go because of unethical conduct that violates the company s policies according to at will employment laws recognized in some states a company may dismiss without warning any employee who is performing poorly or violating some form of the company s rules in fact the company does not need to give a reason for the employee s termination although employment at will contracts do not require an employer to warn or give a reason for a dismissal an employer cannot fire a worker for certain reasons including individuals cannot be fired for these reasons an employer who discharges an employee for exercising their legal rights does so unlawfully and may be liable for wrongful termination in the courts other illegal dismissals occur when an employer lets an employee go for discriminatory reasons such as religion race age gender disability sexual preference or nationality an employer who is found guilty of wrongful termination may be required to compensate the wronged employee and or reinstate them into the company other than at will conditions of employment an employer may fire an employee for a specific cause a termination for cause clause requires the employer to put the employee on an improvement schedule of 60 or 90 days during which the employee is expected to improve their work ethic if the employee does not improve by the end of the probationary period they could be terminated for cause and dismissed with prejudice in some cases an employer may dismiss an employee without prejudice this indicates that the employee was let go for reasons other than incompetence insubordination or misconduct in the workplace in such situations the employee may be rehired for a similar job in the future some employers may provide employees with a notice of termination and pay which is often called severance pay this is common for employees who have worked with a company for more than three months and are involuntarily terminated a company that offers severance does so following an agreement made privately with the employee or because severance is specified in its employee handbook keep in mind though severance packages aren t a requirement under the fair labor standards act flsa employers are not required by federal law to give the terminated employee a final paycheck immediately however state laws differ and may mandate that the employer must not only immediately provide the affected employee with a final paycheck but also include accrued and unused vacation days anyone who is unemployed through no fault of their own may be eligible to receive unemployment benefits each state administers an unemployment insurance ui program to offer temporary financial assistance to people who are unemployed and looking for a job the u s department of labor dol provides detailed information about unemployment insurance benefits the last day with your employer is commonly referred to as your end separation or termination date | |
is getting terminated the same as getting fired | you are terminated from your employment if you are fired the reason for your termination depends and your employer should let you know why they let you go you may be fired for misconduct poor performance or because you re not a good fit for the position or company | |
what are the main reasons for getting fired | employers may fire their employees for misconduct poor job performance violating company policy s theft damage to company property or the use of company materials for personal matters insubordination too many sick days without justification or consistent lateness some employers may build moral clauses into their employment contracts which hold employees to a certain standard in and outside the workplace as such social media activity that goes against these standards may be reason enough to fire an employee | |
what is wrongful termination | wrongful termination occurs when an employee is let go for reasons prohibited by employment law such as discrimination whistleblowing or retaliation employers who fire individuals for not complying with certain requests such as doing dangerous or illegal work are also guilty of wrongful termination companies that change working conditions without notice ultimately forcing an employee to leave or be fired are also said to be in violation of employment laws individuals who are wrongfully terminated may pursue legal action against their former employers | |
how do you fight termination of employment | you may not be able to fight termination of employment if you were let go for a legitimate reason such as restructuring or theft of company property but if you believe you were terminated without just cause there are some steps you can take make sure you understand why you re being terminated if you can appeal the decision with your employer or the company s human resources department request copies of documents including your employment contract any communications between you and your employer regarding your performance as well as your employment file if you have a union contact your representative you can also consult an employment lawyer to take your case to court if you have a case the bottom linethere are many reasons why employees and employers end their relationship some employees may decide to leave their jobs voluntarily while others may be let go because of misconduct poor performance or another reason you have certain rights if you were terminated for instance you have the right to rescind your resignation if you choose to leave voluntarily and you have the right to file an unemployment insurance claim if you lost your job through no fault of your own you may have legal recourse if you believe that your employer retaliated against you and let you go illegally whether that s because you took a leave of absence or because they discriminated against you be sure to check with an employment lawyer if any of these apply | |
what are terms of employment | terms of employment refer to the responsibilities and benefits associated with a job as agreed upon by an employer and employee at the time of hiring these terms which may also be referred to as conditions of employment generally include job responsibilities work hours dress code time off the job and starting salary they may also include benefits such as health insurance life insurance and retirement plans although terms of employment may be agreed upon verbally employees and employers normally sign written contracts but if you are an at will employee your employer can change the terms of employment including your salary hours and worksite at any time | |
how terms of employment work | most employers require professional and administrative employees as well as executives to sign a written employment agreement or contract that details the terms of employment the conditions of employment for hourly employees are often outlined in an employee handbook or company policy manual in certain circumstances terms may also be expressed verbally written terms though can protect both the employee and the employer in addition to the nuts and bolts of salary and benefits terms of employment can specify touchy issues such as dispute resolution nondisclosure agreements and grounds for termination as well as the possibility of a notice of termination job seekers with skills in high demand are often able to negotiate better terms of employment executive level jobs also include negotiations over the terms between hiring managers and candidates whether it s an executive position or an entry level job terms of employment are subject to state or federal guidelines minimum standards for terms of employment in the u s are set by the department of labor dol they include rules covering the minimum wage overtime the standard workweek mandated break times and safety issues 1 the department also governs employment laws in certain industries such as agriculture mining and construction 2 state laws may add additional benefits rules or rights regarding employment within their jurisdictions 3make sure you read the entire employment contract offered by a prospective employer before you sign if you re unsure it s a good idea to have an attorney take a look at it special considerationsemployment contracts are normally considered at will in the united states 4 this means that either the employer or employee can legally terminate the agreement at any time for almost any reason at will employment allows an employee to be fired even if no terms of employment have been violated employment laws protect workers from discrimination due to race gender or religion 4in practice employees with contracts generally have a degree of job security for the length of the contract as long as they do not violate any contract conditions at will laws don t apply in montana the only state of its kind so employees can only be terminated for good reason 5the at will rule also doesn t apply to individuals who are part of labor unions these organizations help protect workers rights by negotiating benefits and other employment conditions including terms of termination employees who work under unions have set contracts and can t be terminated at will thanks to collective bargaining agreements 6terms of employment abroadmost developed and developing countries have codified certain standard terms of employment ireland has its terms of employment information act which outlines rules covering a variety of workplace and labor topics 7 australia s fair work ombudsman sets rules related to pay leave redundancy entitlements and more 8 u s labor laws are not generous compared to those in other parts of the world the european union for example mandates that workers get at least four weeks of vacation every year 9 in finland expectant mothers get paid leave at least six weeks before their due date and 15 more weeks after the birth of a child 10 benefits like these may not be included in your next terms of employment no matter how hard you bargain | |
what are terms of employment | terms of employment refer to the responsibilities and benefits associated with a job as agreed upon by an employer and employee at the time of hiring these terms which may also be referred to as conditions of employment generally include job responsibilities work hours dress code time off the job and starting salary they may also include benefits such as health insurance life insurance and retirement plans although terms of employment may be agreed upon verbally employees and employers normally sign written contracts but if you are an at will employee your employer can change the terms of employment including your salary hours and worksite at any time | |
how terms of employment work | most employers require professional and administrative employees as well as executives to sign a written employment agreement or contract that details the terms of employment the conditions of employment for hourly employees are often outlined in an employee handbook or company policy manual in certain circumstances terms may also be expressed verbally written terms though can protect both the employee and the employer in addition to the nuts and bolts of salary and benefits terms of employment can specify touchy issues such as dispute resolution nondisclosure agreements and grounds for termination as well as the possibility of a notice of termination job seekers with skills in high demand are often able to negotiate better terms of employment executive level jobs also include negotiations over the terms between hiring managers and candidates whether it s an executive position or an entry level job terms of employment are subject to state or federal guidelines minimum standards for terms of employment in the u s are set by the department of labor dol they include rules covering the minimum wage overtime the standard workweek mandated break times and safety issues 1 the department also governs employment laws in certain industries such as agriculture mining and construction 2 state laws may add additional benefits rules or rights regarding employment within their jurisdictions 3make sure you read the entire employment contract offered by a prospective employer before you sign if you re unsure it s a good idea to have an attorney take a look at it special considerationsemployment contracts are normally considered at will in the united states 4 this means that either the employer or employee can legally terminate the agreement at any time for almost any reason at will employment allows an employee to be fired even if no terms of employment have been violated employment laws protect workers from discrimination due to race gender or religion 4in practice employees with contracts generally have a degree of job security for the length of the contract as long as they do not violate any contract conditions at will laws don t apply in montana the only state of its kind so employees can only be terminated for good reason 5the at will rule also doesn t apply to individuals who are part of labor unions these organizations help protect workers rights by negotiating benefits and other employment conditions including terms of termination employees who work under unions have set contracts and can t be terminated at will thanks to collective bargaining agreements 6terms of employment abroadmost developed and developing countries have codified certain standard terms of employment ireland has its terms of employment information act which outlines rules covering a variety of workplace and labor topics 7 australia s fair work ombudsman sets rules related to pay leave redundancy entitlements and more 8 u s labor laws are not generous compared to those in other parts of the world the european union for example mandates that workers get at least four weeks of vacation every year 9 in finland expectant mothers get paid leave at least six weeks before their due date and 15 more weeks after the birth of a child 10 benefits like these may not be included in your next terms of employment no matter how hard you bargain | |
what is the tertiary industry | the tertiary industry is a technical name for the services sector of the economy which encompasses a wide range of businesses including financial institutions schools hotels and restaurants the tertiary industry is one of three primary industrial types in a developed economy the other two being the primary i e raw materials and secondary i e goods production industries as an economy becomes more developed it tends to shift its focus from primary to secondary and tertiary industries investopedia zoe hansenunderstanding the tertiary industrythe tertiary industry is split into two main categories the first is made up of companies in the business of making money such as those in the financial industry the second comprises the nonprofit segment which includes services such as state education the tertiary industry sector makes up the vast majority of employment opportunities and is solely focused on providing services not goods to consumers and other organizations for this reason it is also known as the service sector this is in contrast to the primary industry which produces raw materials and the secondary industry which takes raw materials and uses them to produce salable consumer goods the term tertiary industry can be used to describe a single service oriented organization or the industry segment as a whole examples of tertiary industry organizationsthe tertiary industry provides services as well as operational frameworks for business operations this can include organizations involved in the shipping and transportation industry such as railroad or trucking where the sole focus is on the process of moving goods it could also include the transportation of people such as taxi services city bus systems and subways traditional hospitality industries such as hotels and resorts are a part of the tertiary industry too as are food service providers such as restaurants all services received from financial institutions such as banks and investment brokers are tertiary in nature as well personal services including everything from haircutting to tattooing also fit into this category along with services to animals such as pet groomers animal breeders and stray animal care facilities hospitals clinics veterinarians and other medical service facilities may qualify too pricing challenges in the tertiary industryselling services can often be challenging compared to selling a specific product since goods are tangible it s easy to peg a price to them conversely being intangible it can be difficult to put a value on a specific service in these cases the quality of service depends on the quality of the person providing it and that can vary given people s skills and personalities for instance when two different brokers provide seemingly identical services how can a consumer choose between them transition from tertiary to quaternarycertain technological services were previously considered tertiary though some have determined that it is appropriate to have them categorized into a new segment due to industry growth these technological services include telecommunications providers cable companies and internet providers businesses in this sector are rapidly placing more focus on what is becoming known as the knowledge economy or the ability to surpass competitors by understanding what target customers want and need and operate in a way that meets those wants and needs quickly with minimal cost even though they are all service oriented like the tertiary sector these services have been separated and classified into the quaternary industry sector who has the highest output of tertiary services according to the world bank the following countries are considered to be the largest by service or tertiary output as of 2020 1 | |
what is a testamentary trust | a testamentary trust is a trust that is established in accordance with the instructions contained in a last will and testament a trust is a fiduciary relationship that allows a trustee who is a third party to manage assets on behalf of the beneficiaries of the trust a person s will may include instructions to establish a testamentary trust so that the trustee can distribute the person s assets to the beneficiaries outlined in the will however a testamentary trust is not created until after the person has passed away also a will could have more than one testamentary trust testamentary trusts can be helpful as a part of an overall wealth management strategy since they provide instructions for distributing the assets within a decedent s estate however there are both advantages and disadvantages of testamentary trusts that should be considered before including one in a will testamentary trusts are one of the two types of trust funds allowed by canadian law the second form is the inter vivos trust understanding a testamentary trusta testamentary trust is created to manage the assets of the deceased on behalf of the beneficiaries it is also used to reduce estate tax liabilities and ensure professional management of the assets of the deceased a testamentary trust doesn t exist until the person passes away meaning the trust is essentially part of a set of instructions within a person s will to be drafted by a predetermined representative called an executor or executrix the deceased s assets will be transferred into the newly created trust only after the person has passed away a testamentary trust can be established so that the deceased s assets are paid to the beneficiaries only when certain conditions have been met for example the language within the trust may state that the assets may be accessed by a child of the deceased for educational expenses until the child reaches the age of 25 at which time the balance will be paid out a testamentary trust might also be created to manage the charitable distribution of assets in accordance with the wishes of the deceased requirements for a testamentary trusta testamentary trust usually involves three parties the grantor or trustor who creates the trust the trustee who manages the assets held in trust and the beneficiary or beneficiaries named in the will a trustor has the option of setting up a testamentary trust which will be established upon the death of the trustor the testamentary trust is a provision within the will that outlines the estate s executor and instructs that person to create the trust however the trust is not immediately established after the person s death since the will must go through the probate process probate is the legal process through a local court that verifies the authenticity of a will and the named executor or executrix a testamentary trust remains in effect until a triggering event is named in the will such as a surviving child reaching the age of 21 once the probate process has been completed the trust can be established and the executor transfers the property into the trust the assigned trustee manages the assets until the trust expires and the beneficiary receives the assets the trust s expiration date is usually tied to a specific event such as the beneficiary reaching a certain age or graduating from college until the trust expires the probate court may check in periodically to ensure that the trust is managed properly the trustor can choose anyone to act as a trustee however the trustee appointed is not obligated to take on this role and may decline the request if this happens the court may appoint a trustee or a relative or friend of the beneficiaries involved may volunteer to act as the trustee testamentary trust vs living trusta testamentary trust is a trust that is to contain a portion or all of a decedent s assets outlined within a person s last will and testament a testamentary trust is not established until after the person passes away in which the executor or executrix settles the estate as outlined in the will conversely a living trust is a trust that is established during the person s lifetime in which an appointed person the trustee is responsible for managing the person s assets for the benefit of the beneficiary or beneficiaries of the trust although the instructions for a testamentary trust are outlined while the person is still living the trust itself is not established until after the person passes away only then can assets be distributed and placed into the trust however a living trust also called an inter vivos trust allows for more involvement from the trustor since they re alive when the trust is established also a living trust can be revocable meaning the trustor can change it a living trust can also be irrevocable meaning it cannot be changed once established however a testamentary trust cannot be revocable and is typically established as irrevocable since the trustor has passed away advantages and disadvantages of a testamentary trusta testamentary trust has both advantages and disadvantages although a testamentary trust can be an effective estate planning tool whether it s beneficial or not for a person s financial situation can depend on several factors a testamentary trust can be helpful if the decedent such as a parent has young or minor children and want their assets distributed to them if they pass away prematurely a parent s testamentary trust can be established with instructions that the funds would only be distributed to the beneficiaries following a specific milestone for example funds from the trust would not be distributed to a decedent s children until they turn 18 years of age another advantage to a testamentary trust is that it can be modified while the person is still alive since the trust has not come into existence yet in other words a testamentary trust is essentially a revocable trust since a will can be changed at any time before a person passes away in some cases parents of young children might not have substantial financial assets or perhaps a couple may not be able to afford the cost of establishing a living trust instead they can create a testamentary trust within their will which would only come into effect if they passed away although there s still a cost to create a will the cost of the testamentary trust would come out of the decedent s estate avoiding the expense of creating a trust while still alive if it turns out that later in life they can afford to establish a trust the testamentary trust instructions can be removed from the will and a living trust can be established instead a major disadvantage of a testamentary trust is that it does not avoid probate which is the legal process of distributing assets through the court in other words the executor or executrix must go to the local court with the decedent s will and testament and other documents to prove that they have the right to distribute the decedent s assets and establish the testamentary trust the probate process is necessary to move the assets into the beneficiary s name which can take several months to complete since the testamentary trust would not be established until after the person passes away and the probate process has begun the beneficiaries of the decedent s assets may not receive their assets for several weeks or months another disadvantage of a testamentary trust is that since it must go through probate it becomes a public record as a result the beneficiaries of the testamentary trust would also be a public record there could also be confusion or a lack of clarity within the will and after a person passes away the testamentary trust may not be established properly by not establishing the trust when the person is alive such as the case with a living trust there is a risk that certain details could be overlooked and the wishes of the deceased are not properly executed assets can be distributed to minors after they reach a certain age instructions can be changed while alive this can be a low cost option if money is tight while still living a testamentary trust does not avoid probate with probate the deceased s assets are public record risk exists that the trust may not be exactly as the deceased wanted | |
how to create a testamentary trust | there are many online resources one can use to create your own testamentary trust however these documents can become complicated and inexperienced individuals may not fully understand the implications of the trust they are creating if prepared incorrectly there may be legal repercussions in the future to best make sure the testamentary trust meets your state s regulatory requirements work with a lawyer on drawing up testamentary trust documents in addition this ensures appropriate legal discourse is written to ensure your assets are appropriately distributed to create the actual testamentary trust the settlor must select the trustee and the beneficiary then the settlor selects which assets are to be placed in the trust this also includes the specification of how and when these assets are disbursed to the beneficiary this information is communicated to the beneficiary in the last will and testament when the settlor passes the will passes through probate court as mentioned above after the probate process is completed the trust is created and the funds can be disbursed example of a testamentary trustconsider that a benefactor established a testamentary trust for a beneficiary under the terms of the trust they will receive half of the assets at age 35 and the second half at age 55 let s say the benefactor is leaving 200 000 to a beneficiary setting up a testamentary trust helps ensure a level of financial oversight preventing the beneficiary from impulsive expenditures at an early age consider another example where the deceased trustor has created a testamentary trust for their spouse who is a medicaid applicant assets in the testamentary trust may be used to pay for medical expenses that are not covered under medicaid such as specialist evaluation special equipment or additional therapy under a testamentary trust the value of assets will not factor into the spouse s medicaid eligibility | |
what is a testamentary document | a testamentary document is a document that is added to a person s will outlining specific information or instructions a testamentary document could include a confidentiality agreement or an indemnity document which may remove all financial legal liability for a person or party | |
why do you need a letter of testamentary | a letter of testamentary is important since it is issued by the probate court assigning the executor or executrix named in a person s will with the legal power to act on behalf of the deceased person s estate the letter of testamentary along with the person s death certificate is usually needed in order for the executor to conduct financial transactions on behalf of the estate | |
do i need a lawyer to get a letter of testamentary | typically a lawyer or attorney is necessary to get a letter of testamentary during the probate process particularly if there are multiple beneficiaries however laws can vary depending on each state and in some cases a non attorney may be allowed to manage the probate process for a deceased person the bottom linea testamentary trust can be an effective estate planning and wealth management tool that help ensure a person s beneficiaries receive the assets they re entitled to after the person has passed away however there are many types of trusts available and it s important to contact an expert such as an attorney or financial professional to determine what type of trust is best for specific financial circumstances | |
what is tether usdt | usdt is the symbol for tether a cryptocurrency that is pegged to the u s dollar this means usdt is a stablecoin fluctuating in value with the u s dollar and backed by tether s dollar reserves usdt is issued by tether a company owned by ifinex the hong kong registered company that also owns the crypto exchange bitfinex as of march 2024 usdt was the third largest cryptocurrency after bitcoin btc and ethereum eth and the largest stablecoin with a market capitalization of nearly 99 billion 1 in 2023 and early 2024 tether s usdt accounted for most of the exchanges out of other cryptocurrencies by volume 2understanding tether usdt usdt or tether belongs to a fast growing type of cryptocurrency called stablecoins which avoid the extreme volatility of untethered cryptocurrencies most commonly by tying their values to the price of a traditional currency like the u s dollar tether was launched as realcoin in july 2014 and was rebranded as tether usdt in november 2014 originally based on the bitcoin blockchain tether now supports bitcoin s omni and liquid protocols as well as the ethereum avalanche kava polka tron eos algorand and solana blockchains 3tether also issues tokens pegged to the euro the offshore chinese yuan the mexican peso and gold none with more than a fraction of the market cap of its u s dollar pegged usdt tokens 456a pegged currency is often backed by reserves made up entirely or mostly of the pegged currency a number of fiat currencies are pegged to the u s dollar including those of panama and saudi arabia this protects the currencies from extreme fluctuations in value as their trading values move with the usd the same price stability underlies pegged cryptocurrency tether s transparencytether updates a breakdown of its reserves holdings daily on its website as of march 3 2024 it reported assets of 99 45 billion for usdt the company reported holding 84 58 of its reserves in cash cash equivalents short term deposits and commercial paper 76 87 of this was in u s treasury bills it also held 0 05 of its reserves in corporate bonds 3 62 in precious metals 2 91 in bitcoin 4 95 in secured loans to unaffiliated entities and 3 89 in other investments 6while tether promotes that it backs every usdt with an equivalent amount of currency this isn t entirely the truth as the numbers above show however it has usually honored its 1 to 1 commitment 7a stable value promotes using stablecoins as a medium of exchange like conventional money in practical terms stablecoins have made it easier to speculate in cryptocurrency markets their rapid growth in popularity is also the result of stablecoins use as collateral by decentralized finance defi lending and staking protocols tether historyin november 2017 tether reported the electronic theft of 31 million in usdt tokens the company implemented a hard fork a security technique that involves splitting a blockchain into two streams 8by then the company was already dealing with questions about the adequacy of its reserves and as subsequent investigations would show having trouble accessing banking services 9in april 2019 new york attorney general letitia james obtained a court order enjoining tether and bitfinex parent ifinex from further violations of new york law it had been determined that bitfinex had borrowed at least 700 million from tether s reserves to offset bitfinex corporate and client funds frozen and ultimately seized from its panamanian banking partner crypto capital corp in a money laundering probe 10tether is a chartered member of the blockchain alliance a coalition that works to promote blockchain development and its legal uses 1112in february 2021 tether and bitfinex settled the case by agreeing to pay a fine of 18 5 million discontinue trading with any new york state residents or entities and furnish information about its reserves to the new york attorney general s office for the next two years 13in october 2021 the u s commodity futures trading commission cftc announced that tether agreed to pay a 41 million fine over claims that tether stablecoin was fully backed by u s dollars in fact tether held sufficient fiat reserves in its accounts to back usdt tether tokens in circulation for only 27 6 of the days in a 26 month sample time period from 2016 through 2018 according to cftc bitfinex agreed to pay a 1 5 million fine to settle separate cftc allegations as part of the settlement 14in may 2022 tether s price briefly fell to as little as 0 96 following the terrausd ust peg loss even though it wasn t an issuer affiliated with tether or bitfinex the price of tether tokens quickly rebounded to more than 0 99 and tether said it was continuing to honor redemption requests at a 1 to 1 ratio to the u s dollar 7tether also launched mxnt a stablecoin backed by the mexican peso following earlier expansions into europe eurt and china cnht 4in 2023 tether expanded into artificial intelligence by acquiring northern data group 15 it appointed a new ceo paolo ardoino its former chief technology officer and a staunch cryptocurrency and blockchain financial solutions advocate the same year a lengthy lawsuit against tether and bitfinex was finally concluded following judge laura swain s dismissal of the claims in november 2023 the company also continued participating in several measures to enhance cryptocurrency security educate users and legislators and cooperate with law enforcement agencies 16 | |
how does usdt differ from other cryptocurrencies | usdt is a pegged cryptocurrency meaning its value is only as volatile as that of the u s dollar other examples are usd coin usdc binance usd busd and dai dai one of the benefits of tethering is that it allows investors to easily move money between cryptocurrency markets and the traditional financial system they don t have to wait out steep declines in trading values | |
how can i buy usdt | tether tokens can be bought and sold on cryptocurrency exchanges including binance coinspot bitfinex and kraken some online brokerages also offer cryptocurrencies | |
is tether the biggest stablecoin | yes tether was the first and is the best known stablecoin in the crypto world the company had a market capitalization of nearly 99 billion as of march 2024 the bottom linetether is a cryptocurrency that attempts to maintain a value peg to an underlying currency such as the dollar or euro it does this by keeping enough actual currency or equivalents in reserves that the cryptocurrency holds the same value as the fiat currency tether is primarily used to convert cryptocurrencies to fiat to prevent slippage or a decrease in value between transaction initiation and execution however there are times when it isn t exactly pegged to the fiat currency it is supposed to be tracking for instance when the exchange ftx collapsed in november 2022 tether plummeted to nearly 0 995 but rebounded quickly at times seeing more than a 1 to 1 peg 17the comments opinions and analyses expressed on investopedia are for informational purposes only read our warranty and liability disclaimer for more info as of the date this article was written the author does not own cryptocurrency | |
what is a texas ratio | the texas ratio was developed to warn of credit problems at particular banks or banks in particular regions the texas ratio takes the amount of a bank s non performing assets and divides this number by the sum of the bank s tangible common equity and its loan loss reserves a ratio of more than 100 or 1 1 indicates that non performing assets are greater than the resources the bank may need to cover potential losses on those assets | |
how the texas ratio works | the texas ratio was developed as an early warning system to identify potential problem banks it was originally applied to banks in texas in the 1980s and proved useful for new england banks in the early 1990s the texas ratio was developed by gerard cassidy and other analysts at rbc capital markets cassidy found that banks with a texas ratio of greater than 100 tend to fail during the 1980s texas saw an energy boom banks financed the surge but soon the oil surge died down and banks started to struggle as a result texas saw the greatest number of bank failures from 1986 to 1992 in the nation as part of the texas ratio non performing assets include loans that are in default or real estate the bank has had to foreclose on these could become expenses for the bank on the other side tangible equity does not include intangibles that cannot be used to cover losses such as goodwill special considerationsthe texas ratio is useful for investors as well as customers banking customers will assess the texas ratio to ensure their money is safe this is especially important if a customer has money outside the federal deposit insurance corporation fdic coverage limits 250 000 the texas ratio like many financial ratios is best utilized with other analyses a high ratio doesn t mean the bank will go bankrupt as many banks can operate with high texas ratios example of the texas ratioa bank has 100 billion in non performing assets the bank s total common equity is 120 billion the texas ratio is calculated as non performing assets divided by tangible common equity the ratio is 0 83 or 83 or 100 billion 120 billion although this is somewhat high it s best to look at the ratio in the historical context is the ratio rising or falling if it s falling then the bank may have a solid plan for keeping non performing assets in check there are a number of banks right now as of march 2020 that have texas ratios of over 100 this includes first city bank in florida with a 646 6 texas ratio and the farmers bank in oklahoma at 134 0 both of these banks have assets between 75 and 150 million 1 | |
what is tezos | tezos is a blockchain network hosting the associated digital token tez xtz which is also known as tezzie like other cryptocurrency blockchains tezos facilitates user participation in decentralized finance defi decentralized applications and non fungible token nft projects in contrast with other blockchains tezos precludes hard forks or blockchain splits with a blockchain based governance mechanism that adopts and implements protocol upgrades chosen by voting proportional to users economic stake in tezos history of tezostezos was conceived by arthur breitman a france native and former engineer at google x and waymo who went on to work as a quantitative analyst at morgan stanley ms 2 it was developed with the participation of kathleen breitman arthur s wife and a former employee of the hedge fund bridgewater associates and r3 a software company the couple reportedly met at an anarcho capitalist meetup in new york in 2014 while still working at morgan stanley arthur breitman published a white paper under a pseudonym outlining the principles behind tezos 34 in july 2017 the switzerland based tezos foundation headed by swiss entrepreneur johann gevers organized with the breitmans an initial coin offering ico for tezos that proved to be the most successful ico to date by january 2021 it ranked as the seventh largest crypto coin offering 5in 13 days the ico drew 66 000 bitcoins and 361 000 ethers the ico was valued at 232 million at the time with bitcoin trading at 1 964 4 tezos foundation reported assets of 471 million as of dec 31 2022 6amid investor warnings regarding icos by the u s securities and exchange commission sec including notice that some are investment securities subject to registration under u s law the tezos ico was labeled a fundraiser of donations though it eventually allocated tez in proportion to outside contributions 74the distribution of coins was delayed first by a power struggle between the breitmans and johann gevers who ultimately stepped down as tezos foundation president in early 2018 89nearly a year after the ico in june 2018 the tezos foundation said ico donors awaiting their tez allocations would have to first submit to know your customer kyc and anti money laundering aml verification 1011 as of november 2020 tezos had verified 94 of the ico funds 4in march 2020 the tezos foundation the breitmans and the breitmans company dynamic ledger solutions settled for 25 million in a class action lawsuit brought on behalf of ico participants looking to withdraw their investment 12tez started trading just under 3 in july 2018 but fell to a low of 0 36 by december of that year it peaked at 8 55 in october 2021 and was at 2 21 on june 9 2022 tez was up nearly 9 that day after tether usdt said it would deploy its leading stablecoin on the tezos network 13 tez had a market capitalization of 1 99 billion ranking 33rd among cryptocurrencies as of the same date 1understanding tezoslike bitcoin and ethereum tezos is a decentralized ledger that makes use of blockchain technology like ethereum tezos is designed to make use of smart contracts depending on the source tezos is either the ancient greek term for smart contract or much more likely the name discovered by an algorithm arthur breitman wrote to sift through names unclaimed on the internet and pronounceable in english 14staking 8 000 tez known in the tezos network as a roll permits the owner to operate a network node earning a proportional share of tez rewards for validating blockchain transactions holders of smaller tez sums may delegate them to a network node known in tezos parlance as a baker 1516 | |
when additional tez currency is created at the end of protocol upgrade cycles to compensate developers whose protocol upgrades are adopted baker stakes are increased proportionately as an inflation adjustment 17 | decisions on adopting protocol upgrades depend on voting by bakers in proportion to the size of their stakes and the changes are automatically implemented throughout the blockchain final votes require the participation of owners holding at least 81 of the current coin supply 17all network activity and governance are decentralized and the tezos foundation disclaims any role in its operations instead it supports the development of tezos infrastructure and dispenses grants and other funding to foster adoption of the network 18 | |
how tezos is different | tezos governance protocols distinguish it from bitcoin as well as ethereum which lack formal governance systems and its insistence that the blockchain can t be forked also stands out among cryptocurrencies the provision adjusting active stakes for the creation of new tokens is also unusual and is meant to encourage participation 17additionally tezos backers say its proof of stakes model for blockchain validation consumes less energy than bitcoin mining 19cryptocurrencies are highly speculative and their prices are extremely volatile exercise due diligence and never risk more than you can afford to lose the future of tezosit remains to be seen whether tezos inflation mechanism can really protect stakeholders over the long run by issuing them additional tokens the network s governance protocols and protections against blockchain forks do provide some advantages tezos technology was used in a recent experiment by european central banks exploring the feasibility of launching a digital euro a central bank digital currency 2021tezos has also attracted one of the nft platform backed by music producer quincy jones 22other use cases including cryptocurrency yield farming dependent on rising crypto valuations and buoyant financial markets may prove less resilient over time the comments opinions and analyses expressed on investopedia are for informational purposes online read our warranty and liability disclaimer for more info | |
what is the greatest generation | the greatest generation is a term used to describe those americans who grew up during the great depression and fought in world war ii or whose labor helped win it the term the greatest generation is thought to have been coined by former nbc nightly news anchor and author tom brokaw in his book by the same name the greatest generation is also known as the g i generation or the wwii generation understanding the greatest generationthere are no precise dates that define when members of the greatest generation were born though many give a range of the early 1900s to the mid 1920s the common characteristic of greatest generation members is that they lived through and experienced the hardships of the great depression and later either fought in world war ii or worked in the industries that contributed to winning the war newsman tom brokaw is often credited with popularizing the term through his book the greatest generation which profiled people who came of age during world war ii and was inspired by brokaw s attendance at the 40th anniversary commemoration of the d day invasion of mainland europe 1 brokaw s profiles focused on the soldiers who fought the war as well as the workers whose labor provided the essential material and services in support of them in australia the equivalent of the greatest generation is known as the federation generation | |
how many remain | the youngest members of the greatest generation if using 1925 as the last year they were born would be nearing their 100s in 2024 around 90 000 centenarians were living in the united states in 2021 according to the united nations 2as for wwii veterans in 2023 there were only about 119 550 left out of the 16 1 million who served in world war ii 3 and around 130 greatest generation veterans were thought to be lost every day to old age as of 2023 4 according to research by the washington post the final member of the greatest generation should die around the year 2046 if they can reach age 120 given advances in health care and improvements in life expectancy 5characteristics of the greatest generationwhile every individual is unique demographers and sociologists have identified some common characteristics that often vary from generation to generation among the greatest generation individuals tend to have the following characteristics many of these are thought to stem from living through world war i and the great depression as children and then fighting in or living through world war ii after that the greatest generation and other demographicsgenerally speaking the greatest generation are the parents of the baby boomers and are the children of the lost generation those who grew up during or came of age during world war i they preceded what is known as the silent generation a cohort born between the mid 1920s to the early to mid 1940s the grandchildren of the greatest generation are members of generation x generation y and their great grandchildren tend to be millennials and gen z members of the greatest generation currently fall into the retirees demographic and are currently collecting social security benefits the differences between generations have been extensively studied and socio economic models have been created to help plan for future government expenditures and programs to plan for changes in current demographics | |
why are they called the greatest generation | the greatest generation was popularized by former nbc nightly news anchor and author tom brokaw in his book by the same name the term was meant as a tribute to the resilience and patriotic spirit of those who lived through the great depression and then fought in world war ii | |
how many americans remain from the greatest generation | the youngest members of the greatest generation if using 1925 as the last year they were born would be reaching their 100s as of the year 2024 as of 2021 there were estimated to be around 90 000 centenarians living in the united states 2the bottom linethe greatest generation refers to those americans born between 1900 and 1925 many of whom fought during world war ii these individuals grew up during wwi and lived through the great depression and are often the parents of the baby boomer generation all of this has led these people to be characterized by a great deal of patriotism commitment to work and family frugal lifestyles and motivation to work hard to succeed the term itself was popularized by a book by newsman tom brokaw entitled the greatest generation which was first published in 1998 6 | |
what is a theoretical ex rights price terp | a theoretical ex rights price terp is the market price that a stock will theoretically have following a new rights issue companies may use a new rights issuance to offer more shares to shareholders usually at a discounted price stock prices are affected by new rights issuance because it increases the number of shares outstanding theoretical ex rights price explaineda theoretical ex rights price is a consideration for stock issued through a rights offering typically rights offerings are only available for current shareholders and only offered for a short time approximately 30 days rights offerings usually give shareholders the option to buy a proportioned number of shares at a discounted pre specified price the portion each shareholder is allowed to purchase is based on the shareholder s current stake in the organization the goal is to raise additional capital with preference given to current shareholders stock rights offerings can be a popular event for investors and traders as they may create potential arbitrage opportunities through the rights offering period overall the rights offering period can somewhat mitigate efficient market trading as it creates uncertainty over the stock s price generally stock rights offerings are tools managers can use in raising capital through the stock management may choose to use stock rights offerings to generate additional interest in a company s stock since rights offerings are commonly offered at a discounted price stock rights usually have a diluting effect on a stock s price as such the terp is usually lower than the pre offering market price calculation of a theoretical ex rights pricethe theoretical ex rights price is usually calculated immediately following the last day of a stock s rights offering this calculation makes the stock s price somewhat arbitrary and potentially more enticing for arbitrage trades throughout the rights offering period the simplest way to create a terp estimate is to add the current market value of all shares existing before the rights issue to the total funds raised from the rights issue sales this number is then divided by the total number of shares in existence after the rights issue is complete this calculation results in the value of an individual share after the offering throughout the offering period all types of investors can speculate on the number of shares expected to be taken by shareholders but usually only current shareholders can participate the basis for speculation in this scenario involves the number of share rights available the expected demand and the rights offering price companies may have various types of disclosure for this information which can make the estimate even more difficult the theoretical ex rights price terp is often lower than the stock s price before the offering because rights offerings are usually discounted diluting the stock price investor analysisinvestors can compare the terp to the current value of a share and their expectations for future market appreciation since rights are offered at a discounted price the more rights exercised the more the stock s price becomes diluted however throughout the rights offering period supply and demand still affect the market price so while dilution is occurring investor demand can still increase the prevailing market price investors who are bullish on the stock long term may be more motivated by the offering while bearish or short term investors may not see as much upside real world examplemanagement of abc company has chosen to issue a rights offering the provisions of the offering allow each shareholder to buy shares in the offering based on the percentage of their outstanding shares the new shares are offered to investors at a discounted price to the market price shareholders can use the terp to determine the estimated value of the shares after the rights issue this amount will differ from the current market price it is possible for multiple theoretical estimated values to be calculated for the stock before the end of the offering period based on some different scenarios an investor might look at the terp value if 25 of the shares are purchased in the rights offering versus 50 75 or 100 overall the more shares bought the greater the potential for dilution when the shares are sold at a discounted offering price | |
what is the theoretical value of a right | the theoretical value of a right is the value of a subscription right during the period of time when a new rights offering is announced up until three days before the subscription rights expire known as the cum rights period the value of the right is specific and can easily be calculated to calculate the value of a right during the window in which it is effective and investor must be told the subscription price and the number of rights required to buy one share of stock with that information the value of the right can be calculated using the following formula stock price rights subscription price per share number of rights required to buy one share 1 understanding theoretical value of a right the theoretical value of a right and the market value of a right are generally the same or very similar it is also known as the intrinsic value of the right because the value of stock shares that have rights attached to them during the cum rights period may differ from regular shares without such rights investors want to know this theoretical value real world example of theoretical value of a rightas an example the current price of a stock is 40 the exercise price or subscription price is 35 and four rights are required to purchase a share the theoretical value of the right is 40 35 4 1 1 the period of time about three days before expiration is referred to as the exercise of rights period these are the last days to exercise rights but a period too soon to purchase new shares with rights since the trade will settle before the record date the day the rights expire the theoretical value during the exercise of rights period when rights trade independently of the stock differs from the value during the cum rights period the calculation for the value during the exercise of rights period is stock price right subscription price number of rights needed to buy a share continuing from the above example the stock price during the ex rights period is 38 the theoretical value of the right during the exercise rights period would be 38 35 4 0 75 a right s value is calculated using the same parameters used for pricing options including the rights subscription price prevailing interest rates time to expiration and the share price of the underlying stock taking into consideration the level of its volatility the major difference is that rights have significantly less time value than most options because of their comparatively short lifespan theoretical nil paid priceif an investor chooses to sell his or her right outright in the market or if they choose to let the right lapse which may result in a minimal administrative charge they will receive the theoretical nil paid price of the right this value is calculated by determining the difference between the subscription price the investor paid and the theoretical ex right price considering the example used above the calculation for a theoretical nil paid price looks like this 40 38 2 thus the amount the investor would receive for the right is twice the value of the right during the cum rights period and even greater than the value of the right during the ex rights period | |
what is the theory of price | the theory of price is an economic theory that states that the price for a specific good or service is determined by the relationship between its supply and demand at any given point prices should rise if demand exceeds supply and fall if supply exceeds demand understanding the theory of pricethe theory of price also referred to as price theory is a microeconomic principle that says the market forces of supply and demand will determine the logical price point for a particular good or service at any given time in a free market economy producers typically want to charge as much as they reasonably can for their goods and services while consumers want to pay as little as they can to obtain them market forces will cause the two sides to meet somewhere in the middle at a price consumers are willing to pay and that producers are willing to accept | |
when the quantity of a good or service that s available matches the demand of potential consumers for it the market is said to achieve equilib rium the concept of price theory allows for price adjustments as market conditions change | relationship of supply and demand to price theorysupply denotes the number of products or services that the market can provide this includes both tangible goods such as automobiles and intangible ones such as the ability to make an appointment with a skilled service provider in each instance the available supply is finite in nature there are only a certain number of automobiles available and only a certain number of appointments available at any given time supply may be affected by forces that are beyond a producer s control such as the availability of raw materials demand applies to the market s desire for tangible or intangible goods at any time there is also only a finite number of potential consumers available demand may fluctuate depending on a variety of factors such as whether an improved version of a product is available or if a service is no longer needed demand can also be affected by an item s perceived value by the consumer market as mentioned earlier equilibrium occurs when the total number of items available the supply can be consumed by potential customers if a price is too high customers may avoid the goods or services or find other alternatives this would result in excess supply and possibly cause producers to lower prices in contrast if a price is too low demand may significantly outpace the available supply causing prices to rise again the optimal price taking into account both supply and demand is also referred to as the clearing price example of the theory of pricecompanies often differentiate their product lines vertically rather than horizontally considering consumers differential willingness to pay for quality as noted by michaela draganska of drexel university and dipak c jain of insead in the journal marketing science many firms offer products that vary in characteristics like color or flavor but that do not vary in quality 1their study found that using uniform prices for all products in a particular product line tends to be the best pricing policy for producers for example apple inc offers several different macbook pro laptop computer models with varying screen sizes capabilities and prices the customer has a choice of two colors silver and space gray 2 if apple charged a higher price for a 13 inch silver macbook pro versus an otherwise identical space gray one demand for the silver model might fall and the available supply of the silver model would increase at that point apple might be forced to reduce the price of that model | |
what is the difference between microeconomics and macroeconomics | microeconomics focuses on interactions between individual consumers and the producers of goods and services while macroeconomics looks at the economy as a whole | |
what is elasticity of demand | elasticity of demand or price elasticity of demand measures how sensitive the demand for a particular good or service is to changes in its price if raising the price of a product will have little effect on the demand for it it is said to be relatively inelastic |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.