blue chip The equity shares of companies that are considered large, reputable and reliable; such companies might refer to themselves as ‘blue chip companies’, and companies that regularly do business with blue chip companies often use this fact in their own marketing in the hope that it reflects well on their own reputation (as the blue chip companies are considered good judges). Blue chip companies normally have high market capitalisation and a liquid market in their shares, and they are considered safe bets to make profits even when markets are unhealthy. The term ‘blue chip’ comes from the game of poker, where the blue chips are of the highest value.bond A security whose redemption date is over a year later than its issue date. They may have a fixed redemption date, an option for the borrower to repay at any date, or they could be perpetual. Bonds may be issued by companies, financial institutions or governments and may carry fixed or variable interest. Bonds can vary in the degree of risk, with government bonds being considered the safest, hence their name gilt-edged bonds.
BOO Build, own, operate. A type of project financing where the same contractor arranges the design and construction of a project and then the operation of it when it is complete. The contractor also pays for the project and owns the property permanently (unlike with a BOOT arrangement); to qualify as a BOO as opposed to a standard private project, there is usually some kind of governmental involvement and the project is usually of community or infrastructural importance.book value The net asset value of a company, calculated by subtracting its liabilities from its assets. The book per share value can be used to ascertain whether a stock is overvalued, undervalued or about right, and is arrived at by dividing the book value by number of common stock shares.BOOT Build, own, operate, transfer. A type of project financing, similar to build, own, operate (BOO) except that after an agreed duration, during which the contractor will earn profits from it, ownership is transferred to the original sponsor, usually some form of government.
borrower In a loan arrangement the borrower is the party who receives the money from the lender and then pays it back either in instalments or as a lump sum.BOT Build, operate, transfer. A type of construction project where the contractor designs and builds the project, which is usually heavily influenced by government for infrastructural or communal purposes, and then operates the project until it has made back its money and its profits, at which point ownership is transferred to the government.