Residual Security

Dictionary Says

Definition of 'Residual Security'

A convertible security which may increase the number of current outstanding common shares. A residual security, which is converted or exercised, results in more shares being issued, causing dilution. Corporations may offer residual securities to attract investment capital when competition for funds is highly competitive.

Investopedia Says

Investopedia explains 'Residual Security'

If the residual securities are converted or exercised it will affect financial analysis metrics, such as earnings per share, because the new calculation would require dividing a company's earnings by a greater number of shares. A convertible bond, for example, would be a residual security because it allows the bond holder to convert the security into common shares. Preferred stock may also have a convertible feature.

Articles Of Interest

  1. Weighted Average Cost Of Capital (WACC)

    Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality
  2. Understanding And Playing The Dow Jones Industrial Average

    Learn strategies for investing in this price-weighted index and how to interpret its movements.
  3. Seadrill Still In Motion, But Delivering Better Utilization And Dividends

    Still an aggressively-run company, Seadrill offers highly leveraged exposure to the growing offshore drilling market.
  4. AstraZeneca Looks To Fish Oil To Round Out Its Cardio Portfolio

    AstraZeneca validates the purified fish oil concept, but not at an especially high price.
  5. Cost Discipline Driving The Story At PNC Financial

    If PNC can execute on it cost-cutting initiatves, the value creation could be meaningful
  6. Guide to Pairs Trading

    Pairs traders wait for weakness in the correlation, and then go long on the under-performer while simultaneously going short on the over-performer, closing the positions as the relationship returns ...
  7. Lenovo Still Far From Getting Its Due

    Lenovo's leading share in emerging market IT seems undervalued.
  8. Ralph Lauren Q4 Earnings Up 35%: Buy or Sell?

    Ralph Lauren announced Q4 earnings that were 35% ahead of last year. Unfortunately, it also was very cautious on its 2014 revenue growth. Although its stock's had a good run in the past year ...
  9. Pandora Goes To Up To 11

    Pandora is showing that it can deliver on its model and its goals.
  10. Salesforce.com Still Growing And Still Expensive

    Cloud software and services continues to take share in the enterprise IT market, and Salesforce.com (NYSE:CRM) remains a major player within that trend. Even so, growth is slowing and the company ...
comments powered by Disqus
Marketplace
Hot Definitions
  1. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.
  2. Xenocurrency

    A currency that trades in markets outside of its domestic borders.
  3. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.
  4. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.
  5. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.
  6. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=f29df8b33061735302479f0f61b09729