balance due from a customer.
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.
firm's net income as reported on its income statement.
recurring short-term liabilities, especially accrued wages and
company that seeks to acquire another firm.
Realized Rate of Return,-ks
rate of return on a common stock actually received by stockholders.-ks
may be greater or less that ^ks and/or ks.
that is calculated and added to funds received to determine the
face amount of an installment loan.
Funds Needed (AFN)w
that a firm must raise externally through borrowing or by selling
new common or preferred stock.
Rate Preferred Stocks (ARPs)
stocks whose dividends are tied to the rate on Treasury securities.
Cost of Debt, kd(1-T)
relevant cost of new debt, taking into account the tax deductibility
of interest; used to calculate the WACC.
potential conflict of interest between the agent (manager) and
(1) the outside stockholders or (2) the creditors (debtholders).
report showing how long accounts receivable have been outstanding.
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.
loan that is repaid in equal payments over its life.
arithmetic process of determining the final value of a cash flow
or series of cash flows when interest is added once a year
Percentage Rate (APR)
periodic rate X the number of periods per year.
Percentage Rate (APR)
rate reported by banks and other lenders on loans when the effective
rate exceeds the nominal rate of interest.
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.
series of payments of an equal amount at fixed intervals for a
specified number of periods.
annuity whose payments occur at the beginning of each period.
simultaneous buying and selling of the same commodity or security
in two different markets at different prices, and pocketing a
set of ratios which measure how effectively a firm is managing
situation in which managers have different (better) information
about firms' prospects than do investors.
paid divided by taxable income
Copyright © South-Western. All Rights Reserved.