Guide to Analysing Companies

Syndicated loan
A single loan that is shared among a large number of lenders,
usually because it is too big for any one of them to take on by
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itself. Much of the international lending in the euromarkets
is syndicated.
Synthetic asset
The artificial creation of an asset by combining different forms
of derivatives. For example, by purchasing a call option
and selling a put option on the same stock, an investor can
create a synthetic asset with the same potential for gain as the
underlying security. Similarly, by putting together two in-
terest-rate swaps with offsetting interest payments, an in-
vestor can create, say, a floating-rate note pegged to
libor which also pays a premium twice a year.
SYNTHETIC ASSET
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Tt
Takeover
A change in the controlling interest of a listed company. A
takeover may be friendly and sought by the existing directors.
Or it may be contested (see hostile bid). Either way, it re-
quires the consent of a majority of shareholders who will be
asked to vote on the acquirer’s proposals. Takeovers can be paid
for with cash (so much per share), or the shares of the ac-
quiring company, or a combination of both. In developed
markets, takeovers are strictly regulated in the interests of share-
holders. The directors of acquirers and those whose company is
being taken over traditionally seek the advice of investment
banks in valuing bids, friendly or otherwise. (See also panel
on takeovers and mergers.)
Tap stock
An issue of UK government bonds which is sold bit by bit, not
all at once.
Tax loss
Any loss which a company can legitimately transfer to another
accounting period and set off against its profit for tax pur-
poses. The ability to carry such losses forward (and backwards
against the profits of previous accounting periods) varies from
country to country.
The avoidance of taxes is the only intellectual pursuit 
that still carries any reward. 
John Maynard Keynes 
Tax shelter
An activity that allows a taxpayer the opportunity to shelter
otherwise taxable income from liability to tax. Governments
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are usually quick to plug loopholes that are abused or overused
(such as the tax benefits enjoyed by limited partnerships in the
United States until the 1980s). Most developed countries allow
savers to shelter from tax any money put into legitimate retire-
ment accounts (for example, individual savings ac-
counts
in the UK and individual retirement
accounts and Keogh Plans in the United States). Wealthy in-
dividuals also get tax breaks if they establish foundations for
charitable purposes. These not only save the donor tax but also
increase the flow of cash into bona fide charities.
The difference between tax avoidance and tax evasion 
is the thickness of a prison wall. 
Denis Healey