Innovation is the replacement of an old obligation with a new one.#
In contract law, an innovation replaces one of the parties in a bilateral contract with a third party, with the consent of all three parties.
In the novation, the original contract is invalid. The party that withdraws waives its benefits and obligations.
In financial markets, the use of a clearinghouse to verify a transaction between two parties is called novation.
Novation is different from assignment, where the original party to the agreement retains ultimate responsibility. Thus, the original contract remains in effect.
Acquisition premium is the difference between the estimated real value of a company and the actual price paid for its acquisition in an M&A transaction.
Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.
Back integration is when a company expands its role to perform tasks that were previously performed by enterprises located higher up in the supply chain.
Share capital is the number of ordinary and preferred shares that the company has the right to issue and which are accounted for on the balance sheet as part of share capital.
As a result of the spin-off, the parent company sells a portion of its shares in its subsidiary to the public through an initial public offering (IPO), effectively turning the subsidiary into a stand-alone company.