Marketed Claims

Posted in Finance, Accounting and Economics Terms, Total Reads: 590

Definition: Marketed Claims

Marketed claims are the claims or securities that can be bought or sold in financial markets like those of bondholders and stockholders. A sub-part of marketed claims is negotiable securities. Negotiable securities are those that are traded on the secondary market but the initial sale happens in primary market. Negotiable securities are known as marketable securities. Marketable securities are those that can be converted to cash quickly and earn higher returns than cash. They come with risks and the yield, maturity and liquidity of the securities should be considered.

Types of negotiable securities:

• Low risk: Eg: Treasury bonds

• High Risk: Eg: Stocks

Normally when the value of the firm is calculated in an extended pie model, only the value of marketed claims are included and the value of those claims which cannot be traded in financial markets i.e. non-marketed claims are not included. [Extended pie model is a model which is used to illustrate the relationship between a firm’s cash flows and its value. We need the list of financial claims to calculate the value of the firm’s cash flows.]



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