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Present value. In economics and finance, present value ( PV ), also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is usually less than the future value because money has interest -earning potential, a characteristic referred to as the time value of money ...
The weighted average cost of capital ( WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Importantly, it is dictated by the external market and not by management. The WACC represents the minimum return that a company ...
The face value, sometimes called nominal value, is the value of a coin, bond, stamp or paper money as printed on the coin, stamp or bill itself [1] by the issuing authority. The face value of coins, stamps, or bill is usually its legal value. However, their market value need not bear any relationship to the face value.
Terminal value (finance) In finance, the terminal value (also known as “ continuing value ” or “ horizon value ” or " TV ") [ 1] of a security is the present value at a future point in time of all future cash flows when we expect stable growth rate forever. [ 2] It is most often used in multi-stage discounted cash flow analysis, and ...
In simple terms, the notional principal amount is essentially how much of an asset or bonds a person owns. For example, if a premium bond were bought for £1, then the notional principal amount would be the face value amount of the premium bond that £1 was able to purchase. Hence, the notional principal amount is the quantity of the assets and ...
Tick size is the smallest increment (tick) by which the price of stocks, [ 4] futures contracts [ 5] or other exchange-traded instrument can move. The purpose of having discrete price levels is to balance price priority with time priority. If the tick is too small then too much of a preference is given to price priority meaning that market ...
Enterprise value ( EV ), total enterprise value ( TEV ), or firm value ( FV) is an economic measure reflecting the market value of a business (i.e. as distinct from market price ). It is a sum of claims by all claimants: creditors (secured and unsecured) and shareholders (preferred and common). Enterprise value is one of the fundamental metrics ...
Haircut (finance) In finance, a haircut is the difference between the current market value of an asset and the value ascribed to that asset for purposes of calculating regulatory capital or loan collateral. The amount of the haircut reflects the perceived risk of the asset falling in value in an immediate cash sale or liquidation.