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Premium

For a stock, a premium is the amount for which it sells above its intrinsic value.

In the world of finance, there exists a concept known as "premium." This term represents the additional amount of money that an investor is willing to pay in order to acquire a particular asset. Specifically, in the case of bonds, a premium is the price that exceeds the bond's par value. On the other hand, when it comes to stocks, a premium reflects the price that surpasses the stock's intrinsic value.

Prepayment

Early payment of a debt is known as prepayment. It means paying off a loan or debt before the agreed-upon due date. This can happen for various reasons, such as wanting to a...

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Diversifiable Risk

Diversification is a crucial strategy in managing risk in finance. When an asset is combined with others in a well-diversified portfolio, certain risks can be eliminated. Su...

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External Financing

In the world of finance, projects can be funded through the issuance of new securities, which can be in the form of debt or equity. Debt securities involve borrowing money w...

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Prospectus

A registration statement is a crucial document that provides vital information to potential investors about a company's issuance of securities. It serves as a valuable resou...

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