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Financial Terms | |
accretion |
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Definition of accretionaccretionan increase in units or volume caused by the addition
Related Terms:Accretion (of a discount)In portfolio accounting, a straight-line accumulation of capital gains on discount Z bondAlso known as an accrual bond or accretion bond; a bond on which interest accretes interest but is not Deep-discount bondA bond issued with a very low coupon or no coupon and selling at a price far below par Discount bondDebt sold for less than its principal value. If a discount bond pays no interest, it is called a Discount BondA bond with no coupons, priced below its face value; the return on this bond comes from the difference between its face value and its current price. Pure-discount bondA bond that will make only one payment of principal and interest. Also called a zerocoupon Accrual bondA bond on which interest accrues, but is not paid to the investor during the time of accrual. ![]() ad hoc discounta price concession made under competitive pressure (real or imagined) that does not relate to quantity purchased ADF (annuity discount factor)the present value of a finite stream of cash flows for every beginning $1 of cash flow. Bank discount basisA convention used for quoting bids and offers for treasury bills in terms of annualized Bearer bondbonds that are not registered on the books of the issuer. Such bonds are held in physical form by Bondbonds are debt and are issued for a period of more than one year. The U.S. government, local BONDA long-term, interest-bearing promissory note that companies may use to borrow money for periods of time such as five, ten, or twenty years. BondA long-term debt instrument in which the issuer (borrower) is bondSecurity that obligates the issuer to make specified payments BondA financial asset taking the form of a promise by a borrower to repay a specified amount (the bond's face value) on a maturity date and to make fixed periodic interest payments. ![]() BondUsually a fixed interest security under which the issuer contracts to pay the lender a fixed principal amount at a stated date in the future, and a series of interest payments, either semi-annually or annually. Interest payments may vary through the life of bond. bondA debt security issued by a government or company. You receive regular interest payments at specified rates while you hold the bond and you receive the face value when it matures. Short-term bonds mature in less than five years; medium-term bonds mature in six to ten years; and long-term bonds mature in eleven years or greater. BondFixed interest security issued by a corporation or government, having a specific maturity date. Bond agreementA contract for privately placed debt. Bond covenantA contractual provision in a bond indenture. A positive covenant requires certain actions, and Bond-equivalent basisThe method used for computing the bond-equivalent yield. Bond equivalent yieldbond yield calculated on an annual percentage rate method. Differs from annual Bond-equivalent yieldThe annualized yield to maturity computed by doubling the semiannual yield. Bond Equivalent Yieldbond yield calculated on an annual percentage rate method Bond indentureThe contract that sets forth the promises of a corporate bond issuer and the rights of Bond indexingDesigning a portfolio so that its performance will match the performance of some bond index. ![]() Bond pointsA conventional unit of measure for bond prices set at $10 and equivalent to 1% of the $100 face Bond valueWith respect to convertible bonds, the value the security would have if it were not convertible BONDPARA system that monitors and evaluates the performance of a fixed-income portfolio , as well as the Bonds payableAmounts owed by the company that have been formalized by a legal document called a bond. Brady bondsbonds issued by emerging countries under a debt reduction plan. Bull-bear bondbond whose principal repayment is linked to the price of another security. The bonds are Bulldog bondForeign bond issue made in London. Callable bondA bond that allows the issuer to buy back the bond at a callable bondbond that may be repurchased by the issuer before maturity at specified call price. Canada Savings BondsA bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value. Cash discountAn incentive offered to purchasers of a firm's product for payment within a specified time Collateral trust bondsA bond in which the issuer (often a holding company) grants investors a lien on Completion bondingInsurance that a construction contract will be successfully completed. Conflict between bondholders and stockholdersThese two groups may have interests in a corporation that constant-growth dividend discount modelVersion of the dividend discount model in which dividends grow at a constant rate. Continuous DiscountingThe process of calculating the present value of a stream of future convertible bondbond that the holder may exchange for a specified number of shares. Convertible bondsbonds that can be converted into common stock at the option of the holder. Convertible eurobondA eurobond that can be converted into another asset, often through exercise of Corporate bondsDebt obligations issued by corporations. Coupon BondAny bond with a coupon. Contrast with discount bond. Cushion bondsHigh-coupon bonds that sell at only at a moderate premium because they are callable at a Debenture bondAn unsecured bond whose holder has the claim of a general creditor on all assets of the DiscountReferring to the selling price of a bond, a price below its par value. Related: premium. DiscountThe percentage amount at which bonds sell below their par value. Also the percentage amount at which a currency sells on the forward market below its current rate on the spot market. Discount curveThe curve of discount rates vs. maturity dates for bonds. Discount factorPresent value of $1 received at a stated future date. discount factorPresent value of a $1 future payment. Discount periodThe period during which a customer can deduct the discount from the net amount of the bill discount ratethe rate of return on investment that would be required by a prudent investor to invest in an asset with a specific level risk. Also, a rate of return used to convert a monetary sum, payable or receivable in the future, into present value. Discount rateThe interest rate that the Federal Reserve charges a bank to borrow funds when a bank is Discount RateThe rate of interest used to calculate the present value of a stream discount ratethe rate of return used to discount future cash discount rateInterest rate used to compute present values of future cash flows. Discount RateThe interest rate at which the Fed is prepared to loan reserves to commercial banks. Discount RateA rate of return used to convert a monetary sum, payable or receivable in the future, into present value. Discount securitiesNon-interest-bearing money market instruments that are issued at a discount and Discount windowFacility provided by the Fed enabling member banks to borrow reserves against collateral Discount WindowThe Federal Reserve facility at which reserves are loaned to banks at the discount rate. Discounted basisSelling something on a discounted basis is selling below what its value will be at maturity, Discounted cash flowA technique that determines the present value of future cash Discounted Cash FlowTechniques for establishing the relative worth of a future investment by discounting (at a required rate of return) the expected net cash flows from the project. Discounted cash flow (DCF)Future cash flows multiplied by discount factors to obtain present values. Discounted cash flow (DCF)A method of investment appraisal that discounts future cash flows to present value using a discount rate, which is the risk-adjusted cost of capital. discounted cash flow (DCF)Refers to a capital investment analysis technique Discounted dividend model (DDM)A formula to estimate the intrinsic value of a firm by figuring the Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an DiscountingCalculating the present value of a future amount. The process is opposite to compounding. DiscountingThe process of calculating the present value of a stream of future discountingthe process of reducing future cash flows to present value amounts DiscountingCalculating the present value of a future payment. DiscountingThe process of finding the present value of a series of future cash flows. discounting is the reverse of compounding. Discounting of Accounts ReceivableShort-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable. dividend discount modelComputation of today’s stock price which states that share value equals the present value of all expected future dividends. Dividend discount model (DDM)A model for valuing the common stock of a company, based on the DLOC (discount for lack of control)an amount or percentage deducted from a pro rata share of the value of 100% of an equity interest in a business, to reflect the absence of some or all of the powers of control. DLOM (discount for lack of marketability)an amount or percentage deducted from an equity interest to reflect lack of marketability. Documented discount notesCommercial paper backed by normal bank lines plus a letter of credit from a Dollar bondsMunicipal revenue bonds for which quotes are given in dollar prices. Not to be confused with Dollar price of a bondPercentage of face value at which a bond is quoted. Equivalent bond yieldAnnual yield on a short-term, non-interest bearing security calculated so as to be EurobondA bond that is (1) underwritten by an international syndicate, (2) offered at issuance EurobondA debt security issued in a market other than the home market of eurobondbond that is marketed internationally. Eurodollar bondsEurobonds denominated in U.S.dollars. Euroyen bondsEurobonds denominated in Japanese yen. Extendable bondbond whose maturity can be extended at the option of the lender or issuer. Flower bondGovernment bonds that are acceptable at par in payment of federal estate taxes when owned by Foreign bondA bond issued on the domestic capital market of anther company. Foreign bond marketThat portion of the domestic bond market that represents issues floated by foreign Forward discountA currency trades at a forward discount when its forward price is lower than its spot price. fractional interest discountthe combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor. Full coupon bondA bond with a coupon equal to the going market rate, thereby, the bond is selling at par. General obligation bondsMunicipal securities secured by the issuer's pledge of its full faith, credit, and Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |