Covenant and Market capitalisation: Difference between pages

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1.A formal legal agreement to take, or not to take, certain actions.
(Market cap).


The total market value of a listed company's equity.


2. In loan documentation, a promise given by the borrower to take, or not to take, relevant actions.<ref>http://www.treasurers.org/node/8842</ref>  For example, a ''financial covenant'' to maintain a minimum ratio of net worth to debt.
Sometimes known as the 'equity market capitalisation', or abbreviated to 'capitalisation'.




3. In relation to pension funds, the credit strength of the sponsoring employer and its commitment to the pension fund.
The term highlights the idea that the market price may be overvaluing - or undervaluing - the company, when compared with its intrinsic value.
 
This concept is particularly important in the context of value investing.




== See also ==
== See also ==
* [[Accounting exposure]]
* [[Book value]]
* [[Asset cover]]
* [[Capital]]
* [[Event of default]]
* [[Capitalisation]]
* [[Financial covenant]]
* [[Fair value]]
* [[Incurrence covenant]]
* [[Fundamental analysis]]
* [[Interest cover]]
* [[Intrinsic value]]
* [[Loan agreement]]
* [[Large-cap]]
* [[Maintenance covenant]]
* [[Market value]]
* [[Net worth]]
* [[Mid-cap]]
* [[Restrictive covenant]]
* [[Small-cap]]
* [[Waiver]]
* [[Value investment]]
 
 
==References==
<references/> Treasury Essentials: Covenants, The Treasurer, March 2013
 


==Other links==
[[Category:The_business_context]]
[http://www.treasurers.org/node/5225 Loan agreement covenant performance, Will Spinney, ACT 2009]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Financial_products_and_markets]]

Revision as of 20:46, 10 January 2021

(Market cap).

The total market value of a listed company's equity.

Sometimes known as the 'equity market capitalisation', or abbreviated to 'capitalisation'.


The term highlights the idea that the market price may be overvaluing - or undervaluing - the company, when compared with its intrinsic value.

This concept is particularly important in the context of value investing.


See also