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15 Cards in this Set
- Front
- Back
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Book Value |
The net worth of common equity according to a firm's balance sheet |
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Liquidation Value |
New amount that can be realized by selling the assets of a firm and paying off the debt |
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Replacement Cost |
Cost to replace a firm's assets |
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Tobin's q |
Ration of market value of the firm to replacement cost |
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Intrinsic Value |
The pv of a firm's expected future net cash flows discounted by the required rate of return |
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Market Capitalization Rate |
The market-consensus estimate of the appropriate discount rate for a firm's cash flows |
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Dividend Discount Model (DDM) |
A formula for the intrinsic value of a firm equal to the PV of all expected future dividends |
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Constant-Growth DDM |
A form of the DDM that assumes dividends will grow at a constant rate |
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Dividend Payout Ratio |
Percentage of earning paid out as dividends |
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Plowback Ratio (earnings retention ratio) |
The proportion of the firm's earnings that is reinvested in the business (not paid out as dividends to shareholders) |
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Present Value of Growth Opportunities (PVGO) |
Net PV of a firm's future investments |
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Two-Stage DDM |
DDM in which dividend growth is assumed to level off only at some future date |
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Price-earnings multiple |
The ratio of a stock's price to its earnings per share |
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PEG ratio |
Ratio of P/E multiple to earnings growth rate |
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Earnings Management |
The practice of using flexibility in accounting rules to manipulate the apparent profitability of the firm |
