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Godfather Offer

A Godfather offer is an irrefutable takeover bid made to a target company by an acquirer. Typically, the offer is priced at an extremely generous premium compared with the target's prevailing share price, making it difficult for management to reject the bid without angering shareholders and being accused of breaching their fiduciary duty.A Godfather offer is named after the Francis Ford Coppola movie of the same title. More specifically, the name refers to the film's famous line, "I'm gonna make him an offer he can't refuse." This line has gone on to become one of the most celebrated quotations in cinema.

Delivery Versus Payment

Delivery versus payment (DVP) is a securities industry settlement method that guarantees the transfer of securities only happens after payment has been made. DVP stipulates that the buyer's cash payment for securities must be made prior to or at the same time as the delivery of the security.Delivery versus payment is the settlement process from the buyer's perspective; from the seller's perspective, this settlement system is called receive versus payment (RVP). DVP/RVP requirements emerged in the aftermath of institutions being banned from paying money for securities before the securities were held in negotiable form. DVP is also known as delivery against payment (DAP), delivery against cash (DAC), and cash on delivery.

Cross-Sell

To cross-sell is to sell related or complementary products to a customer. Cross-selling is one of the most effective methods of marketing. In the financial services industry, examples of cross-selling include selling different types of investments or products to investors or tax preparation services to retirement planning clients. For instance, if a bank client has a mortgage, its sales team may try to cross-sell that client a personal line of credit or a savings product like a CD.

Zombie Foreclosure

A zombie foreclosure occurs when a home is left vacant by homeowners who have defaulted on their mortgage and either incorrectly believes they have to immediately move out after receiving a foreclosure notice or choose to abandon the property for other reasons. More commonly, the former scenario where the owner mistakenly believes that the foreclosing lender is now responsible for the property, even though the homeowners still hold title to the property.For example, let's say a homeowner defaults on their mortgage and vacates their property, and the lender doesn't complete the foreclosure process, so the title is still held by the original homeowner. The property becomes unoccupied for an extended time, and the lawn, driveway, etc. is not taken care of. As a result, the state of the property falls into disrepair, creating safety concerns and resulting in an appearance that may lower property values in the surrounding community.

Construction Loan

A Construction Loan is a short-term loan used to cover the costs of building a new structure, such as a house, commercial building, or other real estate projects. Borrowers draw funds as needed during the construction phase and typically only pay interest on the drawn amount. Construction loans usually have higher interest rates due to the increased risk. Upon project completion, the borrower typically converts the construction loan into a long-term mortgage or other types of long-term financing. Construction loans are crucial for developers and builders as they provide the necessary funds to initiate and complete construction projects.

Jensen'S Measure

Jensen's Measure, also known as Jensen's Alpha, is a financial metric used to evaluate the performance of an investment portfolio. It was introduced by Michael Jensen in 1968, hence the name. Jensen's Measure assesses the excess return of a portfolio by comparing its actual return to its expected return, which is typically derived from the Capital Asset Pricing Model (CAPM). If the portfolio's actual return exceeds the expected return, the Jensen's Measure is positive, indicating that the portfolio has outperformed market expectations. Conversely, if the actual return is below the expected return, the Jensen's Measure is negative, indicating underperformance. Jensen's Measure is crucial for assessing the investment skills of fund managers and the effectiveness of their investment strategies.