Corporate Capital

AAA

DEFINITION of 'Corporate Capital'

The assets a business possesses that can serve as an income shock absorber to a specific class of stakeholders. Should the company experience financial difficulty, the capital in one class of stakeholder would be decreased in order to protect another stakeholder with a senior priority.

INVESTOPEDIA EXPLAINS 'Corporate Capital'

In the most ideal situation, where a business has very little risk of defaulting on a debt obligation, the amount of corporate capital would be close to the amount of the firm's shareholder's equity (total assets minus total liabilities). In the event of financial difficulties, any losses sustained would initially impact the firm's corporate capital (in the form of descending company's equity) before it would impact other senior stakeholders (such as bondholders).

RELATED TERMS
  1. Capital Markets

    Markets for buying and selling equity and debt instruments. . ...
  2. Capital

    1) Financial assets or the financial value of assets, such as ...
  3. Default

    1. The failure to promptly pay interest or principal when due. ...
  4. Unsubordinated Debt

    A loan or security that ranks above other loans or securities ...
  5. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) ...
  6. Shareholders' Equity

    A firm's total assets minus its total liabilities. Equivalently, ...
Related Articles
  1. Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

  2. Investing Basics

    Using Appreciative Inquiry To Solve ...

  3. Investing Basics

    The Basics Of Value Chain Analysis

  4. Investing Basics

    Top Tools for ERP Enterprise Resource ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center