Claim dilution
A reduction in the likelihood one or more of the firm's claimants will be fully repaid, including time value of money considerations. |
Similar financial terms
Nonmarketed claimsClaims that cannot be easily bought and sold in the financial markets, such as those of the government and litigants in lawsuits.
Marketed claims
Claims that can be bought and sold in financial markets, such as those of stockholders and bondholders.
Claimant
A party to an explicit or implicit contract.
Contingent claim
A claim that can be made only if one or more specified outcomes occur.
Dilution
Loss in existing shareholder’s value. There are several kinds of dilution: (a) dilution of ownership, (b) dilution of market value and (c) dilution of book value and earnings, as with warrants and convertible issues. Firms with a substantial amount of warrants or convertible issues outstanding are required to report earnings on a fully diluted basis.
