Dividend discount modelIn financial economics, the dividend discount model (DDM) is a method of valuing the price of a company's capital stock or business value based on the assertion that intrinsic value is determined by the sum of future cash flows from dividend payments to shareholders, discounted back to their present value.
DividendA dividend is the distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings).Terminal value (finance)In finance, the terminal value (also known as “continuing value” or “horizon value” or "TV") 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. It is most often used in multi-stage discounted cash flow analysis, and allows for the limitation of cash flow projections to a several-year period; see Forecast period (finance).Stock valuationStock valuation is the method of calculating theoretical values of companies and their stocks.
Discounted cash flowMethod of valuing a project, company, or asset The discounted cash flow (DCF) analysis, in financial analysis, is a method used to value a security, project, company, or asset, that incorporates the time value of money. Discounted cash flow analysis is widely used in investment finance, real estate development, corporate financial management, actuarial science, and patent valuation.
Preferred stockPreferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument.
Time value of moneyThe time value of money refers to the idea that there is generally a greater benefit to receiving a sum of money now rather than an identical sum later. It may be seen as an implication of the later developed concept of time preference. The time value of money refers to the observation that it is better to receive money sooner than later. Money you have today can be invested to earn a positive rate of return, producing more money tomorrow.
AnnuityIn investment, an annuity is a series of payments of the same kind made at equal time intervals, usually over a finite term. Annuities are commonly issued by life insurance companies, where an individual pays a lump sum or a series of premiums in return for regular income payments, often to provide retirement or survivor benefits. Typical examples include regular deposits to a savings account, monthly home mortgage payments, monthly insurance premiums and pension payments.Real estate appraisalReal estate appraisal, home appraisal, property valuation or land valuation is the process of assessing the value of real property (usually market value). Appraisal reports form the basis for mortgage loans, settling estates and insurance policies, taxation, etc. Sometimes an appraisal report is also used to establish a sale price for a property. Factors like size of the property, condition, age, and location play a key role in the valuation.
Basel IIIBasel III is a framework published by the Basel Committee on Banking Supervision (BCBS) in response to the deficiencies in financial regulation revealed by the 2008 financial crisis. It sets international standards and recommendations for bank capital requirements, stress tests, liquidity regulations, and leverage, with the goal of mitigating the risk of bank runs and bank failures.Tier 1 capitalTier 1 capital is the core measure of a bank's financial strength from a regulator's point of view. It is composed of core capital, which consists primarily of common stock and disclosed reserves (or retained earnings), but may also include non-redeemable non-cumulative preferred stock as well as physical gold held in vaults.
Consol (bond)Consols (originally short for consolidated annuities, but subsequently taken to mean consolidated stock) were government debt issues in the form of perpetual bonds, redeemable at the option of the government. The first British consols were issued by the Bank of England in 1751. They have now been fully redeemed. The United States government issued consols from 1877 to 1930, which have likewise been redeemed.*As an Amazon Associate I earn from qualifying purchases.