LEVERAGE HYPOTHESIS Definition

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LEVERAGE HYPOTHESIS is the theory that managers have incentive to avoid technical default of loan covenants because it could result in increases in the firm's cost of capital.

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YIELD TO PUT is the effective annual rate of return a bond earns assuming it is held until the bond's put date, not maturity, and is put (sold) to the issuer at a specific price (put price).

CONTRIBUTION MARGIN ANALYSIS is a technique used in brand marketing and product management to help a company decide what product(s) to add to its product portfolio. The manager asks what will happen to profits if a new product is added or an existing product is discontinued. Calculations take into account additional revenues, additional costs, effects on other products in the portfolio (referred to as cannibalization), and competitors reactions.

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