Dales Outstanding (DSO)
length of time required to collect credit sales.
Sales Outstanding (DS0)
calculated by dividing accounts receivable by average sales per day;
indicates the average length of time the firm must wait after making
a sale before receiving cash.
bond that is not secured by a mortgage on specific property.
on which a firm's directors issue a statement declaring a dividend.
Risk Premium (DRP)
between the interest rate on a U. S. Treasury bond and a corporate bond
of equal maturity and marketability.
designed to make a company less vulnerable to takeover.
for assets used in production Depreciation is not a cash outlay.
whose values are determined by the market price or interest rate of
some other asset.
that can be detached from a bond and traded independently of it.
of officially reducing the value of a country's currency relative to
of the checks which we have written but which are still being processed
and thus have not been deducted from our account balance by the bank.
that sells below its par value; occurs whenever the going rate of interest
rises above the coupon rate.
that is calculated on the face amount of a loan but is paid in advance.
on Forward Rate
when the spot rate is less than the forward rate.
of time required for an investment's cash flows, discounted at the investment's
cost of capital, to cover its cost.
of finding the present value of a cash flow or a series of cash flows;
discounting is the reverse of compounding.
of a security's risk associated with random events; it can be eliminated
by proper diversification.
of some of a company's operating assets.
that a firm's dividend policy has no effect on either its value or its
cost of capital.
as to how much of current earnings to pay out as dividends rather than
to retain for reinvestment in the firm.
Reinvest Plan (DRP)
that enables a stockholder to automatically reinvest dividends received
back into the stock of the paying firm.
dividend divided by the current price of a share of stock.
designed to show the relationships among return on investment, asset
turnover, the profit margin, and leverage.
which shows that the rate of return on assets can be found as the product
of the profit margin times the total assets turnover
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