    

|
|
|
|
|
|
| |
Generically, a kicker is a condition that causes some kind of increase or augmentation. In investing, kicker is most often used in terms of an equity kicker for some form of debt. Debt without an equity kicker does offer investors the advantage of guaranteed payments, but no opportunity to participate in the success of the company. By including an equity kicker in the form of stock rights, warrants, or some other equity feature, the equity kicker makes the security more attractive to investors. Assuming the equity kicker at some point is converted into stock, the investor can receive dividends or benefit from capital appreciation. For the issuing company, an equity kicker reduces service costs, because investors are willing to forego some guaranteed interest in return for the equity kicker. In fact, the equity kicker may be a de facto requirement where companies are new or struggling and can only sell debt by including an equity kicker. Debt with an equity kicker is subordinated debt and is usually relatively more risky than ordinary debt. From an accounting standpoint, an equity kicker raises numerous issues, since the hybrid security it creates is not easily classified as either debt or equity.
Rate this kicker definition...
|
|
|
|
 |
Where is the market headed? The answer may surprise you. Find out with the exclusive & Barron's recommended charts of Chart of the Day. |
|
Popular Terms: in escrow, stock split, deferred revenue, implied volatility, cancelled check, FICO score, wholly-owned subsidiary, required rate of return, phantom income, 401a, risk management, average price per share, annual return, margin rate, 144a, ex-dividend, 1031 exchange, ex-dividend date, class C shares, covered put, liquidity ratio, retained earnings, debt service coverage, VIX, current ratio, open position, diluted share, option premium, balance sheet, limit order, deferred tax, inflation, reverse mortgage, 1035 exchange, FTSE, LIBOR, per diem, dividends payable, stock market close, irrevocable trust, Key Rate Duration, APR, real GDP, EBITDA, minority interest, labor relations, Zero Cost Collar, quality assurance, command economy
|
|
| |