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. How Mergers and Acquisitions Can Affect ...
    Investing Basics

    How Mergers and Acquisitions Can Affect ...

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

    Examples Of Using SWOT Analysis To Get ...

  4. Benefits Of Doing A SWOT Analysis
    Investing Basics

    Benefits Of Doing A SWOT Analysis

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center