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Definition of Conversion value
Also called parity value, the value of a convertible security if it is converted immediately.
The percentage by which the conversion value of a convertible security exceeds the
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in todayâ€™s dollars of cash flows that occur in different time periods.
The net present value analysis of an asset if financed solely by equity
With respect to convertible bonds, the value the security would have if it were not convertible
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
The ratio of stockholder equity to the average number of common shares. Book value
The length of time between a firm's purchase of inventory and the receipt of cash
An amount the insurance company will pay if the policyholder ends a whole life
Rules set by the Chicago Board of Trade for determining the invoice price of each
Related:Market conversion price
The percentage by which the conversion price in a convertible security exceeds the
The number of shares of common stock that the security holder will receive from
The amount of advantage over a current market transaction provided by an in-the-money
The weighted average of a probability distribution.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Extraordinary positive value
A positive net present value.
See: Par value.
Firm's net value of debt
Total firm value minus total firm debt.
Use of a firm's call option on a callable convertible bond when the firm knows that the
The amount of cash at a specified date in the future that is equivalent in value to a specified
Intrinsic value of an option
The amount by which an option is in-the-money. An option which is not in-themoney
Intrinsic value of a firm
The present value of a firm's expected future net cash flows discounted by the
Net amount that could be realized by selling the assets of a firm after paying the debt.
The amount a policyholder may borrow against a whole life insurance policy at the interest rate
Market conversion price
Also called conversion parity price, the price that an investor effectively pays for
1) The price at which a security is trading and could presumably be purchased or sold.
Market value ratios
Ratios that relate the market price of the firm's common stock to selected financial
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
Related: par value.
Net adjusted present value
The adjusted present value minus the initial cost of an investment.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
Net book value
The current book value of an asset or liability; that is, its original book value net of any
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
Net present value of growth opportunities
A model valuing a firm in which net present value of new
Net present value of future investments
The present value of the total sum of NPVs expected to result from
Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs
Net salvage value
The after-tax net cash flow for terminating the project.
Original face value
The principal amount of the mortgage as of its issue date.
Also called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date.
The amount of cash today that is equivalent in value to a payment, or to a stream of payments,
Present value factor
Factor used to calculate an estimate of the present value of an amount to be received in
Present value of growth opportunities (NPV)
Net present value of investments the firm is expected to make
Price value of a basis point (PVBP)
Also called the dollar value of a basis point, a measure of the change in
The attractiveness measured in terms of risk, liquidity, and return of one instrument relative to
Current cost of replacing the firm's assets.
Usually refers to the value of a lessor's property at the time the lease expires.
Scrap value of plant and equipment.
Also called the normal deviate, the distance of one data point from the mean, divided by
Stated conversion price
At the time of issuance of a convertible security, the price the issuer effectively
Also called investment value, the value of a convertible security without the con-version option.
The value of a bond at maturity, typically its par value, or the value of an asset (or an entire
Time value of an option
The portion of an option's premium that is based on the amount of time remaining
Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar
The welfare a given investor assigns to an investment with a particular return and risk.
Method of indirect taxation whereby a tax is levied at each stage of production on the value
Value-at-Risk model (VAR)
Procedure for estimating the probability of portfolio losses exceeding some
Value additivity principal
Prevails when the value of a whole group of assets exactly equals the sum of the
In the market for Eurodollar deposits and foreign exchange, value date refers to the delivery date
Refers to when value or credit is given for funds transferred between banks.
A manager who seeks to buy stocks that are at a discount to their "fair value" and sell them at
An assetâ€™s cost basis minus accumulated depreciation.
BOOK VALUE OF COMMON STOCK
The theoretical amount per share that each stockholder would receive if a companyâ€™s assets were sold on the balance sheetâ€™s date. Book value equals:
CAPITAL IN EXCESS OF PAR VALUE
What a company collected when it sold stock for more than the par value per share.
An arbitrary value that a company may assign to its stock. Par value has no relationship to what the stock is selling for on the open market.
The amount management estimates a piece of equipment will be worth at the end of its useful life, either as a trade-in or if it were sold for scrap.
Cash value added (CVA)
A method of investment appraisal that calculates the ratio of the net present value of an
Economic Value Added (EVA)
Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge
Net present value (NPV)
A discounted cash flow technique used for investment appraisal that calculates the present value of future cash flows and deducts the initial capital investment.
Increasing the value of the business to its shareholders, achieved through a combination of
A variety of approaches that emphasize increasing shareholder value as the primary goal of every business.
No par value stock
Stock issued by the company that does not have an arbitrary value (par value) assigned to it.
An arbitrary value assigned by the company to each share of stock; it is used in the accounting for the sale of stock and in some jurisdictions for calculating taxes.
Stated value stock
Stock issued by the company that does not have a par value, but does have a stated value. For accounting purposes, stated value is functionally equivalent to par value.
book value and book value per share
Generally speaking, these terms
Refers to the sum of manufacturing direct labor and overhead
net present value (NPV)
Equals the present value (PV) of a capital investment
present value (PV)
This amount is calculated by discounting the future
The value of an asset as carried on the balance sheet of a
Book Value per Share
The book value of a company divided by the number of shares
The value of the possible outcomes of a variable weighted by the
The nominal value of a security. Also called the par value.
The amount a given payment, or series of payments, will be worth
The net proceeds (after taxes and expenses) of selling the assets
Net Present Value (NPV)
The present value of all future cash inflows minus the present value
Nominal value of a security. Same as face value.
Present Value (PV)
The dollar value at the present time (year zero) of a single cash
The amount necessary to duplicate a company's assets at current
The value attributed to a company to represent all future cash flows
approximated net realizable value at split-off allocation
a method of allocating joint cost to joint products using a
an activity that is necessary for the operation of the business but for which a customer would not want to pay
the process of transformation or change
the total of direct labor and overhead cost;
economic value added (EVA)
a measure of the extent to which income exceeds the dollar cost of capital; calculated
the amount to which one or more sums of
net present value (NPV)
the difference between the present values of all cash inflows and outflows for an investment project
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