Certain provisions such as confidentiality and exclusivity may be made binding. Due diligence follows the letter of intent and the share purchase agreement is then negotiated.
Related terms
Mergers and acquisitions (M&A)The general term for mergers of companies and for one company acquiring or disposing of another company or business line.Non-disclosure agreement (NDA)An agreement providing that confidential information shared between the parties is used only for the agreed purpose and not disclosed to third parties.Share purchase agreement (SPA)The agreement governing the price, payment terms, representations and warranties, indemnities and closing conditions in a share transfer.BetaA coefficient measuring the sensitivity of a share's return to changes in the market return, that is, its systematic risk.Break-even pointThe sales volume or amount at which total revenue equals total cost and the business makes neither profit nor loss.Capital asset pricing model (CAPM)A model that calculates the cost of equity from the risk-free rate, beta and the market risk premium.
Last updated: October 31, 2026 · This definition is for general information only.