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Financial Terms | |
Growing perpetuity |
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Definition of Growing perpetuityGrowing perpetuityA constant stream of cash flows without end that is expected to rise indefinitely.
Related Terms:GEMs (growing-equity mortgages)Mortgages in which annual increases in monthly payments are used to PerpetuityA constant stream of identical cash flows without end, such as a British consol. PerpetuityA special case of an annuity with no set maturity. Payments are perpetuityStream of level cash payments that never ends. PPF (periodic perpetuity factor)a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity. All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the Asset/equity ratioThe ratio of total assets to stockholder equity. ![]() Bottom-up equity management styleA management style that de-emphasizes the significance of economic Common stock/other equityValue of outstanding common shares at par, plus accumulated retained Contra-equity accountAn account that reduces an equity account. An example is Treasury stock. Cost of EquitySame as the cost of common stock. Sometimes viewed as the Debt/equity ratioIndicator of financial leverage. Compares assets provided by creditors to assets provided Debt/Equity RatioA comparison of debt to equity in a company's capital structure. debt-to-equity ratioA widely used financial statement ratio to assess the Deferred equityA common term for convertible bonds because of their equity component and the Dual syndicate equity offeringAn international equity placement where the offering is split into two ![]() EquityRepresents ownership interest in a firm. Also the residual dollar value of a futures trading account, EquityFunds raised from shareholders. EquityAmounts contributed to the company by the owners (contributed capital) plus the residual earnings of the business (retained earnings). equityRefers to one of the two basic sources of capital for a business, the EquityThe difference between the total of all recorded assets and liabilities on the balance EquityOwnership. Common stock represents equity in a corporation. EquityThe net worth of a business, consisting of capital stock, capital (or paid-in) surplus (or retained earnings), and, occasionally, certain net worth reserves. Common equity is that part of the total net worth belonging to the common shareholders. Total equity includes preferred shareholders. The terms common stock, net worth, and common equity are frequently used interchangeably. equityThe net worth of a company. This represents the ownership interest of the shareholders (common and preferred) of a company. For this reason, shares or stocks are often known as equities. Equity-based insuranceLife insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio. Equity Buy-BackRefers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount. Equity capAn agreement in which one party, for an upfront premium, agrees to compensate the other at ![]() Equity claimAlso called a residual claim, a claim to a share of earnings after debt obligation have been Equity collarThe simultaneous purchase of an equity floor and sale of an equity cap. Equity contribution agreementAn agreement to contribute equity to a project under certain specified Equity floorAn agreement in which one party agrees to pay the other at specific time periods if a specific Equity investmentThrough equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock. Equity kickerUsed to refer to warrants because they are usually issued attached to privately placed bonds. Equity-linked policiesRelated: Variable life Equity marketRelated:Stock market Equity MethodAccounting method for an equity security in cases where the investor has sufficient Equity multiplierTotal assets divided by total common stockholders' equity; the amount of total assets per Equity optionsSecurities that give the holder the right to buy or sell a specified number of shares of stock, at Equity SecurityAn ownership interest in an enterprise, including preferred and common stock. Equity swapA swap in which the cash flows that are exchanged are based on the total return on some stock EquityholdersThose holding shares of the firm's equity. Euroequity issuesSecurities sold in the Euromarket. That is, securities initially sold to investors Foreign equity marketThat portion of the domestic equity market that represents issues floated by foreign companies. Graduated-payment mortgages (GPMs)A type of stepped-payment loan in which the borrower's payments Investor's equityThe balance of a margin account. Related: buying on margin, initial margin requirement. Leveraged equityStock in a firm that relies on financial leverage. Holders of leveraged equity face the Long-term debt to equity ratioA capitalization ratio comparing long-term debt to shareholders' equity. owners' equityRefers to the capital invested in a business by its shareowners Owners' equityThe total of all capital contributions and retained earnings on a business’s Preferred equity redemption stock (PERC)Preferred stock that converts automatically into equity at a Quasi-EquityFunds, other than paid-up capital and retained earnings, employed in a business and which will remain in a business as permanent capital. RAMs (Reverse-annuity mortgages)mortgages in which the bank makes a loan for an amount equal to a 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: RATIO OF DEBT TO STOCKHOLDERS’ EQUITYA ratio that shows which group—creditors or stockholders—has the biggest stake in or the most control of a company: 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 Shareholder's EquityRepresents the total assets of a corporation less liabilities. Shareholders' equityThis is a company's total assets minus total liabilities. A company's net worth is the Shareholders' equityThe total amount of contributed capital and retained earnings; synonymous with stockholders' equity. Shareholders' EquityThe residual interest or owners' claims on the assets of a corporation Stockholder equityBalance sheet item that includes the book value of ownership in the corporation. It Stockholder's equityThe residual claims that stockholders have against a firm's assets, calculated by Stockholders' equityThe total amount of contributed capital and retained earnings; synonymous with shareholders’ equity. stockholders' equity, statement of changes inAlthough often considered STOCKHOLDERS’ (OR OWNERS’) EQUITYThe value of the owners’ interests in a company. Stratified equity indexingA method of constructing a replicating portfolio in which the stocks in the index Top-down equity management styleA management style that begins with an assessment of the overall Total debt to equity ratioA capitalization ratio comparing current liabilities plus long-term debt to Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |