Month: July 2024

|Z| M&A Term Definition Note Z-spread Fixed number of basis points that would be added to the gilt yield curve at all durations so that the present value of a bond’s future payments equals its market price. Z-spread is a measure of a bond’s credit risk. Therefore, it will be zero for gilts and high…

|Y| M&A Term Definition Note yield  Return on an investment expressed as a percentage. Most often used to refer to the gross redemption yield on a bond, being the return to a purchaser if the bond is held to maturity ignoring taxes and the prospect of default. Another term for interest rate. (See also nominal…

|W| M&A Term Definition Note Waterfall  the contractual allocations of Cash Flows, commonly resulting from a liquidity event (e.g., merger, acquisition, initial public offering), to the various ownership classes (e.g., debt, preferred equity, common equity) in a business, reflecting the economic rights of each class N7 Weighted Average Cost of Capital (WACC) a measure of…

|V| M&A Term Definition Note Valuation the act or process of developing an opinion or conclusion of value at a Valuation Date using a Premise of Value, a Standard of Value, and one or more Valuation Approaches. Also known as Appraisal. N7 Valuation Approach a general manner of estimating a value that uses one or…

|U| M&A Term Definition Note Unlevered Beta a measure of Beta reflecting a capital structure without debt. Also known as asset beta. Contrast with Levered Beta N7 Unlevered Cost of Capital the expected Rate of Return that the market requires in order to attract funds to a particular investment, assuming an unlevered Capital Structure. See…

|T| M&A Term Definition Note T+1, T+2, T+3 Abbreviations that refer to the settlement date of security transactions. The T stands for the day the transaction takes place. The numbers 1, 2 and 3 denote how many days after the transaction date the settlement or the transfer of money and security ownership takes place. N6…