Guide to Analysing Companies

Yield to maturity
The same as redemption yield, the yield that takes into
account the premium or discount in the purchase price of a
fixed-interest security.
YIELD TO MATURITY
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Zz
Zakat
The practice among Muslims of making an annual donation to
charity or to the community at large. The word 
zakat literally
means “purification” and “growth”. Donors are allowed to
deduct expenses and what they owe in taxes. They may also set
aside the equivalent of 85g of gold; on the remaining balance
they are obliged to pay a levy equal to at least 2.5% of their
wealth.
Zero-coupon bond
A security bought and sold in the secondary market at a
deep discount to its face value because it carries no
coupon; that is, it pays no interest to the bondholder. Pur-
chasers get their profit from the gradual increase in the market
price as the price closes the gap with the bond’s face value, that
is, the amount repayable when it reaches maturity.
Zero-coupon preference share
A share issued in the UK by a split-capital investment
trust (closed-end fund) and carrying no dividend. As
with zero-coupon bonds, the shares are usually issued at a
discount and appreciate in value as they reach maturity.
Zeroes rank higher than ordinary shares and are entitled to
a certain proportion of the trust’s accumulated capital when it is
wound up. For this reason, they are often used by investors
who know when they will need the money (for example, when
a child goes to university or when the holder retires).
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Document Outline

• Contents
• Introduction
• The changing face of markets
• A to Z
  • A
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  • F
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  • I
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  • U
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  • X
  • Y
  • Z