Financial Glossary


W

Wall Street. A street in lower Manhattan that is the original home of the New York Stock Exchange. The street is the historic headquarters of the largest U.S. brokerages and investment banks. Many have since relocated to other areas of Manhattan and the United States. Wall Street was named after the wooden wall Dutch colonists built in this area in 1653 to defend themselves from the British and Native Americans. Put another way, it is the collective name for the financial and investment community, which includes stock exchanges and large banks, brokerages, securities and underwriting firms, and big businesses.

Waiver. The voluntary process by which investors relinquish a contractual right (such as a covenant), usually by affirmative vote of at least a majority of the affected investors. The effect of granting a waiver is either that the issuer is not in breach of a contractual obligation or that the issuer can take an action that would otherwise be contractually prohibited.

Warrant. Certificates allowing the holder the opportunity to buy shares in a company at a stated price over a specified period. Warrants are usually issued in conjunction with a new issue of bonds, preferred shares or common shares. Put another way, the right (but not the obligation) to acquire common stock during a specified period by paying an agreed amount of money. The exercise price of a warrant can be nominal ($.001) or significant.

Weighted Average. A form of antidilution protection that adjusts the conversion price or the amount of securities into which a convertible security converts when a subsequent offering of securities (common stock or preferred stock) is made at a lower price. Unlike full ratchet antidilution provisions, the weighted average price protection is affected by the size or amount of the subsequent issuance to reflect the actual adverse impact incurred by the security holder. The conversion price is reduced by applying a complicated formula based on the shares outstanding prior to the new issue of securities and the current conversion price, and the amount of money received by the issuer divided by the number of fully diluted shares of common stock outstanding after the new issue.

Weighted Average Cost of Capital (WACC). The Required Rate of Return that must be paid or received by all of the investors with respect to a company's securities. Used as a hurdle rate for capital. The relative proportions of equity and debt in a company's capital structure determine the weightings.

Whisper Number. Earnings estimates built from a conseus of various analysts' projections and other information.

White Knight. A friendly potential acquirer sought out by a target company that is threatened by a less welcome suitor.

Working Capital Management. The management of Current Assets and Current Liabilities to maximize short-term liquidity.

World Bank. An agency of the United Nations established at the end of the Second World War to promote post-war economic recovery, development and trade -- principally by providing development finance. The Bank promotes economic development and growth in developing countries by providing investment resources (e.g. capital and expertise) in support of development projects and micro-economic policy reforms that contribute to growth.

World Trade Organization (WTO). Established on January 1, 1995, the World Trade Organization provides the institutional framework for the GATT and all agreements and arrangements concluded under the auspices of the Uruguay Round of multilateral trade negotiations. Agreements were concluded in the fields of agriculture, services, investment, intellectual property, textiles, etc. The WTO will be headed by a Ministerial Conference which will meet at least once every two years. The WTO institutional framework includes a Dispute Settlement Body and a Trade Policy Review Mechanism.

Working Capital. The lifeblood of a company, it is the money the company has sloshing around, ready to stick into the business. Take the total current assets and subtract the total current liabilities. (Because they are "current," this means they will either be converted into cash shortly or need to be paid shortly.) In calculating a company's working capital, you compare money the company has at its disposal to money it needs to pay out in the near future

Wrap Account. An account offered by investment dealers whereby investors are charged an annual management fee based on the value of invested assets.