May 21, 2013

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Flexible Spending Account

A Flexible Spending Account is a type of benefit offered by employers that allows you (employer) to make contributions from pre-taxed wages to a fund for qualifying expenses. Such expenses include child care and any other such uncovered medical expenses. You must determine the amount to contribute in advance, and any amount that is not [...]

Depreciate

Depreciate means to allocate the purchase cost of an asset over the period of its life.

Depreciation

Depreciation is an expense that is non-cash that will provide the investor with a source of free cash flow.

Homemade Dividend

Homemade Dividend refers to the selling of certain shares of stock to receive cash back. Similar to a cash dividend.

Cash Dividend

A Cash Dividend refers to a dividend that is paid in cash to a company’s shareholders. The amount paid to the company is normally based on profitability outlook for the selected company. This dividend is taxable as income.

Dividend

A Dividend is simply is a portion of a company’s profit paid to common and preferred shareholders. Example: If you purchased a stock selling for $40 per share with an annual dividend of $4, then you yielded a 10% return of investment. There are also cash dividends and homemade dividends.

Hell or High Water Contract

A Hell or high Water Contract is a type of contract that obligates the purchaser of a project’s output to make cash payments to the project in all events, even if no product is offered for sale. This is an all or nothing type of deal.

Hedge Fund

A Hedge Fund is a type of fund bought by investors that uses a variety of techniques to gain the greatest amount of return for the investor.

Hedge

A Hedge is a transaction that you (the investor) makes to reduce the risk of a certain investment.

Auction Markets

Auction Markets are markets in which the prevailing price is determined through the free interaction of prospective buyers and sellers. The floor of the stock exchange is a great example of an auction market.