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Definition of Growth rates
Compound annual growth rate for the number of full fiscal years shown. If there is a negative
Decisions concerning the operation of the firm, such as the choice of firm size, firm
Version of the dividend discount model in which dividends grow at a constant rate.
Also called the Gordon-Shapiro model, an application of the dividend discount
Times in a company's history when growth is essential and without which survival of the business might be in jeopardy.
The exchange rate between two currencies expressed as the ratio of two foreign exchange rates
a method of computing the cost
A model wherein dividends are assumed to be at a constant rate in perpetuity.
Theory that expected spot exchange rate equals the forward rate.
Mutual funds that seek long-term capital growth. This type of fund invests primarily in equity securities.
A money manager who seeks to buy stocks that are typically selling at relatively high P/E
Opportunity to invest in profitable projects.
A phase of development in which a company experiences rapid earnings growth as it produces
an estimate of the increase expected in dividends
Common stock of a company that has an opportunity to invest money and earn more than the
Maximum rate a firm can expand without outside source of funding. growth generated
internal growth rate
Maximum rate of growth without external financing.
Multiple rates of return
More than one rate of return from the same project that make the net present value
Net present value of growth opportunities
A model valuing a firm in which net present value of new
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Present value of growth opportunities (NPV)
Net present value of investments the firm is expected to make
present value of growth opportunities (PVGO)
Net present value of a firm’s future investments.
Real exchange rates
Exchange rates that have been adjusted for the inflation differential between two countries.
Simple compound growth method
A method of calculating the growth rate by relating the terminal value to
Spot exchange rates
Exchange rate on currency for immediate delivery. Related: forward exchange rate.
Sustainable growth rate
Maximum rate of growth a firm can sustain without increasing financial leverage.
sustainable growth rate
Steady rate at which a firm can grow without changing leverage; plowback ratio × return on equity.
Term Structure of Interest Rates
Relationship among interest rates on bonds with different terms to maturity.
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