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. An Overview Of Corporate Bankruptcy
    Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

  2. Examples Of Using SWOT Analysis To Get ...
    Investing Basics

    Examples Of Using SWOT Analysis To Get ...

  3. Analyzing Warren Buffett's 2013 Famous ...
    Economics

    Analyzing Warren Buffett's 2013 Famous ...

  4. The Economics of Hulu, Netflix, Redbox ...
    Investing News

    The Economics of Hulu, Netflix, Redbox ...

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center