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Absolute priority |
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Definition of Absolute priorityAbsolute priorityRule in bankruptcy proceedings whereby senior creditors are required to be paid in full
Related Terms:Absolute AdvantageThe ability to produce a good or service with fewer resources than competitors. See also comparative advantage. Absolute Right of ReturnGoods may be returned to the seller by the purchaser without restrictions. Priority-based budgetA budget that allocates funds in line with strategies. Abnormal returnsPart of the return that is not due to systematic influences (market wide influences). In Accounting rate of return (ARR)A method of investment appraisal that measures accounting rate of return (ARR)the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. annual returnThe fund return, for any 12-month period, including changes in unit value and the reinvestment of distributions, but not taking into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would reduce returns. Annualized holding period returnThe annual rate of return that when compounded t times, would have Appraisal rightsA right of shareholders in a merger to demand the payment of a fair price for their shares, as Arithmetic average (mean) rate of returnArithmetic mean return. Arithmetic mean returnAn average of the subperiod returns, calculated by summing the subperiod returns Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average rate of return (ARR)The ratio of the average cash inflow to the amount invested. book rate of returnAccounting income divided by book value. Book ReturnsBook yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets. CARs (cumulative abnormal returns)a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock. Comparative AdvantageA country has a comparative advantage over another country in the production of good A if to produce a unit of A it forgoes more of the production of good B than would the other country when it produces a unit of good A. Its efficiency in the production of good A relative to its efficiency in the production of good B is greater than is the case for the other country. See also absolute advantage. Competitive AdvantageThe strategies, skills, knowledge, resources or competencies that differentiate a business from its competitors. Conversion RightTerm life insurance products are offered as non-convertible or convertible to a certain time in the future. The coversion right has a time limit, usually to the policy holder's age 60 or possibly even age 70. This right means that the policy holder has the right to convert their existing policy to another specific different plan of permanent insurance within the specified time period, without providing evidence of insurability. There is a slightly higher cost for a term policy with the conversion priviledge but it is a valuable feature should a policy holder's health change for the worst and continued insurance coverage becomes a necessity. Cum rightsWith rights. Cumulative abnormal return (CAR)Sum of the differences between the expected return on a stock and the Dividend rightsA shareholders' rights to receive per-share dividends identical to those other shareholders receive. Dollar returnThe return realized on a portfolio for any evaluation period, including (1) the change in market Dollar-weighted rate of returnAlso called the internal rate of return, the interest rate that will make the Ex post returnRelated: Holding period return Ex-rightsIn connection with a rights offering, shares of stock that are trading without the rights attached. Ex-rights dateThe date on which a share of common stock begins trading ex-rights. Exante returnThe expected return of a portfolio based on the expected returns of its component assets and Excess return on the market portfolioThe difference between the return on the market portfolio and the Excess returnsAlso called abnormal returns, returns in excess of those required by some asset pricing model. Expected future returnThe return that is expected to be earned on an asset in the future. Also called the Expected returnThe return expected on a risky asset based on a probability distribution for the possible rates Expected ReturnThe total amount of money (return) an investor anticipates to receive from an investment. Expected return-beta relationshipImplication of the CAPM that security risk premiums will be Expected return on investmentThe return one can expect to earn on an investment. See: capital asset Geometric mean returnAlso called the time weighted rate of return, a measure of the compounded rate of Holding period returnThe rate of return over a given period. Horizon returnTotal return over a given horizon. Incremental internal rate of returnIRR on the incremental investment from choosing a large project Internal rate of returnDollar-weighted rate of return. Discount rate at which net present value (NPV) Internal rate of return a. The average annual yield earned by an investment during the period held. Internal rate of returnThe rate of return at which the present value of a series of future Internal rate of return (IRR)A discounted cash flow technique used for investment appraisal that calculates the effective cost of capital that produces a net present value of zero from a series of future cash flows and an internal rate of return (IRR)The precise discount rate that makes the Internal Rate of Return (IRR)The discount rate that equates the present value of the net cash internal rate of return (IRR)the expected or actual rate of internal rate of return (IRR)Discount rate at which project NPV = 0. Inventory returnsInventory returned from a customer for any reason. This receipt Leveraged required returnThe required return on an investment when the investment is financed partially by debt. Liquidation rightsThe rights of a firm's securityholders in the event the firm liquidates. Market returnThe return on the market portfolio. Money rate of returnAnnual money return as a percentage of asset value. Multiple rates of returnMore than one rate of return from the same project that make the net present value Net advantage of refundingThe net present value of the savings from a refunding. Net advantage to leasingThe net present value of entering into a lease financing arrangement rather than Net advantage to mergingThe difference in total post- and pre-merger market value minus the cost of the merger. Outright rateActual forward rate expressed in dollars per currency unit, or vice versa. Portfolio internal rate of returnThe rate of return computed by first determining the cash flows for all the Preemptive rightCommon stockholder's right to anything of value distributed by the company. Property rightsrights of individuals and companies to own and utilize property as they see fit and to receive Purchase returnsA contra account that reduces purchases by the amount of items purchased that were subsequently returned. rate of returnTotal income per period per dollar invested. Rate of Returnreturn on invested capital (calculated as a percentage). Often an investor has, as one of their investment criteria, a minimum acceptable rate of return on an acquisition. RATE OF RETURN ON STOCKHOLDERS’ EQUITYThe percentage return or profit that management made on each dollar stockholders invested in a company. Here’s how you figure it: RATE OF RETURN ON TOTAL ASSETSThe percentage return or profit that management made on each dollar of assets. The formula is: Rate of return ratiosRatios that are designed to measure the profitability of the firm in relation to various Realized returnThe return that is actually earned over a given time period. Required returnThe minimum expected return you would require to be willing to purchase the asset, that is, ReturnThe change in the value of a portfolio over an evaluation period, including any distributions made ReturnSee yield. return of capitalthe recovery of the original investment (or principal) in a project Return on assets (ROA)Indicator of profitability. Determined by dividing net income for the past 12 months return on assets (ROA)Although there is no single uniform practice for return on capitalincome; it is equal to the rate of return multiplied by the amount of the investment Return on capital employed (ROCE)The operating profit before interest and tax as a percentage of the total shareholders’ funds plus Return on Common Equity RatioA measure of the percentage return earned on the value of the Return on equity (ROE)Indicator of profitability. Determined by dividing net income for the past 12 return on equity (ROE)This key ratio, expressed as a percent, equals net return on investmenta ratio that relates income generated Return on investment (ROI)Generally, book income as a proportion of net book value. RETURN ON INVESTMENT (ROI)In its most basic form, the rate of return equals net income divided by the amount of money invested. It can be applied to a particular product or piece of equipment, or to a business as a whole. Return on investment (ROI)The net profit after tax as a percentage of the shareholders’ investment in the business. return on investment (ROI)A very general concept that refers to some return on salesThis ratio equals net income divided by sales revenue. Return on total assetsThe ratio of earnings available to common stockholders to total assets. Return on Total Assets RatioA measure of the percentage return earned on the value of the Return-to-maturity expectationsA variant of pure expectations theory which suggests that the return that an RightA short-lived (typically less than 90 days) call option for purchasing additional stock in a firm, issued Right of ReturnA sales agreement provision that permits a buyer to return products purchased rights issueIssue of securities offered only to current stockholders. Rights offeringIssuance of "rights" to current shareholders allowing them to purchase additional shares, Rights-onShares trading with rights attached to them. Riskless rate of returnThe rate earned on a riskless asset. Safety-net returnThe minimum available return that will trigger an immunization strategy in a contingent Sales returnsA contra account that offsets revenue. It represents the amount of sales made that were later returned. Special drawing rights (SDR)A form of international reserve assets, created by the IMF in 1967, whose stock appreciation righta right to receive cash, stock, or a combination of cash and stock based on the difference between a specified dollar amount per share of stock and the quoted market price per share at some future date Subperiod returnThe return of a portfolio over a shorter period of time than the evaluation period. T-period holding-period returnThe percentage return over the T-year period an investment lasts. Target rate of return pricingA method of pricing that estimates the desired return on investment to be achieved from the
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