Account
Receivable
A
balance due from a customer.
Accounting
Beta Method
A
method of estimating a project's beta by running a regression
of the company's return on assets against the average return on
assets for a large sample of firms.
Accounting
Profit
A
firm's net income as reported on its income statement.
Accruals
Continually
recurring short-term liabilities, especially accrued wages and
accrued taxes.
Acquiring
Company
A
company that seeks to acquire another firm.
Actual
Realized Rate of Return,-ks
The
rate of return on a common stock actually received by stockholders.-ks
may be greater or less that ^ks and/or ks.
Add-On
Interest
Interest
that is calculated and added to funds received to determine the
face amount of an installment loan.
Additional
Funds Needed (AFN)w
Funds
that a firm must raise externally through borrowing or by selling
new common or preferred stock.
Adjustable
Rate Preferred Stocks (ARPs)
Preferred
stocks whose dividends are tied to the rate on Treasury securities.
After-tax
Cost of Debt, kd(1-T)
The
relevant cost of new debt, taking into account the tax deductibility
of interest; used to calculate the WACC.
Agency
Problem
A
potential conflict of interest between the agent (manager) and
(1) the outside stockholders or (2) the creditors (debtholders).
Aging
Schedule
A
report showing how long accounts receivable have been outstanding.
Amortization
Schedule
A
table showing precisely how a loan will be repaid. It gives the
required payment on each payment date and a breakdown of the payment,
showing how much is interest and how much is repayment of principal.
Amortized
Loan
A
loan that is repaid in equal payments over its life.
Annual
Compounding
The
arithmetic process of determining the final value of a cash flow
or series of cash flows when interest is added once a year
Annual
Percentage Rate (APR)
The
periodic rate X the number of periods per year.
Annual
Percentage Rate (APR)
A
rate reported by banks and other lenders on loans when the effective
rate exceeds the nominal rate of interest.
Annual
Report
A
report issued annually by a corporation to its stockholders. It
contains basic financial statements, as well as management's opinion
of the past year's operations and the firm's future prospects.
Annuity
A
series of payments of an equal amount at fixed intervals for a
specified number of periods.
Annuity
Due
An
annuity whose payments occur at the beginning of each period.
Arbitrage
The
simultaneous buying and selling of the same commodity or security
in two different markets at different prices, and pocketing a
risk-free return.
Arrearages
Unpaid
preferred dividends.
Asset
Management Ratios
A
set of ratios which measure how effectively a firm is managing
its assets.
Asymmetric
Information
The
situation in which managers have different (better) information
about firms' prospects than do investors.
Average
Tax Rate
Taxes
paid divided by taxable income
.
Copyright © South-Western. All Rights Reserved.
webmaster
|
