What Is Equity and Owner’s Equity? The term “equity” means something of value or worth. It can also mean ownership. Generally, when looking at equity you want to consider the value of something and how much you owe is on that value. What’s left over is equity. Owner’s equity is an owner’s ownership in the business, that is, the value of the business assets owned by the business owner. It’s the amount the owner has invested in the business minus any money the owner has taken out of the company....

Perpetual preferred stocks are called that because they give shareholders a priority claim when the company distributes or pays out assets to those who own the stock. However, owning perpetual preferred stock does not give preference in any way when it comes to corporate governance. Perpetual preferred stock owners usually don’t get to vote in company elections. How companies handle these preferred shareholders’ economic preferences varies. For example, some companies may deem that any cash available for distributions during the year must be applied toward promised payments to perpetual preferred stock shareholders before the company can pay out any common dividends....

As a way to entice investors to participate in pre-IPO placements, companies often promise high returns by getting you in on the ground floor and before public investors are invited to participate. How Pre-IPO Placement Works A pre-IPO placement is a type of private placement, which means the company issues unregistered securities. Due to Securities and Exchange Commission (SEC) regulations, the securities in private placements are usually only available to accredited investors....

Learn what a stock’s relative strength is, how to calculate it, and how to use it when trading. What Is Relative Strength? A stock’s relative strength is its price change, as a percentage, compared to another stock’s price change. Using simple math, a trader can view which of two stocks is performing better. It is not a trading indicator but a tool used to help evaluate a stock’s performance. Alternate name: Relative Price Strength...

Market manipulation isn’t always clear-cut. In January 2021, retail investors got together to counter a hedge fund’s short position on the GameStop stock at the behest of Reddit page “wallstreetbets.” While that drove the price of GameStop stock up significantly, it soon came crashing down. In February, the law firm Hagens Berman announced a class action lawsuit against one of the main instigators on the Reddit page, alleging price manipulation....

Solskin / Getty Images A basic understanding of the underlying principles and tools used when conducting technical analysis can help you improve your investment research. What Is Technical Analysis? The creation of technical analysis is largely credited to Charles Dow, co-founder of The Wall Street Journal and the Dow Jones Industrial Average. Instead of analyzing a company’s dynamics, such as its balance sheet or corporate structure, technical analysis uses price and volume data to attempt to predict future security prices....

Traditional commercial loans focus on earning as much interest as possible and reducing the risk of default, but private loans are designed to benefit the borrower. The AFR puts a cap on how generous the terms of a private loan can be. Acronym: AFR The IRS published an annual short-term AFR of 1.85%, mid-term AFR of 2.51%, and long-term AFR of 2.66% in April 2022. Let’s say you decided to lend $5,000 to your child who just lost their job....

Alternative name: $15,000 First-Time Homebuyer Tax Credit The First-Time Homebuyers Act of 2021 intends to help households with lower incomes purchase homes. According to the bill, individuals and married people who file jointly would qualify for a tax credit worth up to o$15,000. Unmarried individuals who purchase a home together could split the credit and married couples filing separately would also receive a $7,500 tax credit each. To qualify for the proposed credit, your modified adjusted gross income can’t exceed 160% of the median income in the area where the property is located....

You must fill out a FAFSA if you want access to federal student aid. If you choose not to fill out the application, funding options include scholarships, grants, and private student loans. Acronym: FAFSA For example, Amir is applying for college, so he fills out a FAFSA (which includes the list of schools he wants to attend) and submits it. In three days to three weeks, the Department of Education (DOE) sends him a student aid report (SAR) detailing how much his family is expected to contribute to his college costs....

Here are some things to consider when determining what coverage is required and where you can be more flexible. The Most Important Car Insurance Coverage The most important coverage has to be your state’s minimum liability and property damage coverage. More than anything else, you need to maintain car insurance to keep yourself legal to drive. You risk losing your driver’s license and fines driving without it. Get into an accident without liability coverage and you could be facing enormous penalties including bills from the damages you caused....

There are five standard deductions, based on your filing status and whether you’re married: SingleMarried filing jointlyMarried filing separatelyQualifying widow(er)Head of household (single but with one or more dependents) An Example of the Standard Deduction Once you identify your standard deduction, you then can deduct that amount from your taxable income. For example, if you’re married and filing jointly with your spouse, you may decide to take your standard deduction of $25,900 in tax year 2022....

Alternate name: recessionary trough How Does a Trough in the Business Cycle Work? A trough in the business cycle marks the low point in the economic cycle. It follows a period of decline after the economy hits peak productivity. Employment and output will fall for a time, and the government often steps in to stimulate a recovery. As the economy works through the trough, growth will resume and the cycle will begin again....

Because implied volatility is used to determine the price of an options contract, the higher the implied volatility of the underlying security, the higher the options contract price will be. Thus, if an investor expects volatile markets, vega can be a valuable tool to find out how much the option premium will change as the implied volatility of a security swings up or down. For example, perhaps you want to invest in call options on ABC Technology Inc....

Loan types covered by RESPA are many, but there are several loan types specifically exempt from the law. Although it may be good business practice to disclose all costs and affiliated business arrangements anyway, lenders are not required to do so by RESPA for these exempted loan types. What Is Respa? RESPA is a federal law that requires mortgage brokers, lenders, and servicers to provide borrowers with disclosures about costs associated with a loan and what to expect from the real estate transaction process....

The economy added 528,000 jobs in July, the Bureau of Labor Statistics said Friday. That more than doubled the expectations of economists, whose median prediction was for just 258,000. It was the most hiring in any month since February, and now brings the number of people working to its highest level ever, surpassing February 2020 for the first time since the pandemic hit and recovering the last of the 22 million jobs lost when the pandemic hit....

Depending on several factors, the difference between the actual total return and the one depicted can be quite large. Learn about the main reasons why this discrepancy exists. Charts Can Fail To Reflect Dividends and Other Distributions Many businesses pay out part of their profits in the form of cash dividends. Great businesses are able to increase earnings faster than the rate of inflation. This can lead to rapid dividend growth....

According to a March 2022 NBC News Poll report on CNBC, more than one in five Americans have traded in cryptocurrencies. However, cryptocurrency can be difficult to understand and there are risks to consider. If you’re a teenager or the parent of one, learn the basics about what cryptocurrency is, investing in cryptocurrency, the risks of cryptocurrency, and more. What Is Cryptocurrency? Cryptocurrency is a type of virtual currency with its value secured through cryptography and transactions recorded through blockchain technology....

As we enter the second year of staying closer to home, those vouchers may be expiring soon. If your voucher’s expiration date is approaching or you’re not sure when your travel credit expires, and you’re not sure when you’ll feel comfortable traveling, here’s what you need to know. What’s Happening? When the extent of the coronavirus pandemic became clearer, many airlines grounded between 60% and 80% of their flights. However, despite federal law requiring airlines to offer cash refunds when they cancel flights, many airlines provided travel vouchers instead....

There are still options for those who don’t qualify or have issues with their SBA loan application. Learn what factors come into play that may impact your SBA loan application’s approval, how to appeal if you’ve been denied, and what alternatives are available. Why Was Your SBA Loan Declined? There are a number of factors that could impact your SBA loan application or even cause it to be denied. Usually, an application is denied if it is incomplete or if certain requirements are not met....

For instance, it’s easy to find yourself committed to a lot more work than you originally agreed upon, or expected to behave in ways that are more appropriate for a full-time employee. A certain amount of consideration is to be expected when a client books a hefty percentage of your time. It’s good business to make sure your best customers are happy. Let your clients forget that you’re not an employee, and you could find yourself doing full-time work for part-time wages, with no benefits, paid time off, or unemployment insurance....