642 Glossary
Vertical merger: A merger in which the two firms are from different stages of the
same industry or production process (e.g., an automobile manufacturer purchases a
steelmaker).
WA N : A wide area network is a connection of two or more computers which are geo-
graphically distant from each other. The typical purpose of a WAN is to send data or
communicate with distant facilities. Thus, an airline might have a WAN connecting
all of its airports world wide to allow for the quick communications of scheduling
changes between its various facilities.
Weighted average cost of capital (WACC):The cost of capital (discount rate) de-
termined by the weighted average, at market value, of the cost of all financing
sources in the business enterprise’s capital structure.
Windows NT or 2000:Quickly becoming the network operating system standard
of the industry. Developed by Microsoft.
Write an option:Sell an option. The writer is paid the option premium up front.
The writer of a call must later sell the underlying asset if the call option owner
exercises. The writer of a put must later buy the underlying asset if the put option
owner exercises. The writer of the option is essentially liable for any future payoffs
received by the option owner. Also known as shorting the option.