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Investment value |
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Definition of Investment valueInvestment valueRelated:straight value.
Related Terms:Net present value of future investmentsThe present value of the total sum of NPVs expected to result from Straight valueAlso called investment value, the value of a convertible security without the con-version option. NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay. PV (present value of cash flows)the value in todayâ€™s dollars of cash flows that occur in different time periods. Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity Bond valueWith respect to convertible bonds, the value the security would have if it were not convertible Book valueA company's book value is its total assets minus intangible assets and liabilities, such as debt. A Book value per shareThe ratio of stockholder equity to the average number of common shares. Book value Carrying valueBook value. Cash-surrender valueAn amount the insurance company will pay if the policyholder ends a whole life Conversion valueAlso called parity value, the value of a convertible security if it is converted immediately. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a Exercise valueThe amount of advantage over a current market transaction provided by an in-the-money Expected return on investmentThe return one can expect to earn on an investment. See: capital asset Expected valueThe weighted average of a probability distribution. Expected value of perfect informationThe expected value if the future uncertain outcomes could be known Extraordinary positive valueA positive net present value. Face valueSee: Par value. Firm's net value of debtTotal firm value minus total firm debt. Foreign direct investment (FDI)The acquisition abroad of physical assets such as plant and equipment, with Future investment opportunitiesThe options to identify additional, more valuable investment opportunities Future valueThe amount of cash at a specified date in the future that is equivalent in value to a specified Guaranteed investment contract (GIC)A pure investment product in which a life company agrees, for a Intrinsic value of an optionThe amount by which an option is in-the-money. An option which is not in-themoney Intrinsic value of a firmThe present value of a firm's expected future net cash flows discounted by the Investment analystsRelated: financial analysts Investment bankFinancial intermediaries who perform a variety of services, including aiding in the sale of Investment decisionsDecisions concerning the asset side of a firm's balance sheet, such as the decision to Investment grade bondsA bond that is assigned a rating in the top four categories by commercial credit Investment incomeThe revenue from a portfolio of invested assets. Investment managerAlso called a portfolio manager and money manager, the individual who manages a Investment product line (IPML)The line of required returns for investment projects as a function of beta Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment trustA closed-end fund regulated by the investment Company Act of 1940. These funds have a InvestmentsAs a discipline, the study of financial securities, such as stocks and bonds, from the investor's Legal investmentsinvestments that a regulated entity is permitted to make under the rules and regulations Liquidation valueNet amount that could be realized by selling the assets of a firm after paying the debt. Loan valueThe amount a policyholder may borrow against a whole life insurance policy at the interest rate Market value1) The price at which a security is trading and could presumably be purchased or sold. Market value ratiosRatios that relate the market price of the firm's common stock to selected financial Market value-weighted indexAn index of a group of securities computed by calculating a weighted average Maturity valueRelated: par value. Mutually exclusive investment decisionsinvestment decisions in which the acceptance of a project Net adjusted present valueThe 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 valueThe current book value of an asset or liability; that is, its original book value net of any Net investmentGross, or total, investment minus depreciation. Net present value (NPV)The present value of the expected future cash flows minus the cost. Net present value of growth opportunitiesA model valuing a firm in which net present value of new Net present value ruleAn investment is worth making if it has a positive NPV. Projects with negative NPVs Net salvage valueThe after-tax net cash flow for terminating the project. Original face valueThe principal amount of the mortgage as of its issue date. Par valueAlso called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date. Parity valueRelated:conversion value Passive investment strategySee: passive management. Passive investment managementBuying a well-diversified portfolio to represent a broad-based market Present valueThe amount of cash today that is equivalent in value to a payment, or to a stream of payments, Present value factorFactor 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 Reinvestment rateThe rate at which an investor assumes interest payments made on a debt security can be Reinvestment riskThe risk that proceeds received in the future will have to be reinvested at a lower potential REIT (real estate investment trust)Real estate investment trust, which is similar to a closed-end mutual Relative valueThe attractiveness measured in terms of risk, liquidity, and return of one instrument relative to REMIC (real estate mortgage investment conduit)A pass-through tax entity that can hold mortgages Replacement valueCurrent cost of replacing the firm's assets. Residual valueUsually refers to the value of a lessor's property at the time the lease expires. Return on investment (ROI)Generally, book income as a proportion of net book value. Salvage valueScrap value of plant and equipment. Short-term investment servicesServices that assist firms in making short-term investments. Standardized valueAlso called the normal deviate, the distance of one data point from the mean, divided by Terminal valueThe value of a bond at maturity, typically its par value, or the value of an asset (or an entire Time value of an optionThe portion of an option's premium that is based on the amount of time remaining Time value of moneyThe idea that a dollar today is worth more than a dollar in the future, because the dollar Underinvestment problemThe mirror image of the asset substitution problem, wherein stockholders refuse Unit investment trustMoney invested in a portfolio whose composition is fixed for the life of the fund. Utility valueThe welfare a given investor assigns to an investment with a particular return and risk. Value-added taxMethod 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 principalPrevails when the value of a whole group of assets exactly equals the sum of the Value dateIn the market for Eurodollar deposits and foreign exchange, value date refers to the delivery date Value datingRefers to when value or credit is given for funds transferred between banks. Value managerA manager who seeks to buy stocks that are at a discount to their "fair value" and sell them at Zero-investment portfolioA portfolio of zero net value established by buying and shorting component BOOK VALUEAn assetâ€™s cost basis minus accumulated depreciation. BOOK VALUE OF COMMON STOCKThe 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 VALUEWhat a company collected when it sold stock for more than the par value per share. PAR VALUEAn 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. 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. SALVAGE VALUEThe 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 Investment centreA division or unit of an organization that is responsible for achieving an adequate return on 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. Return on investment (ROI)The net profit after tax as a percentage of the shareholdersâ€™ investment in the business. Shareholder valueIncreasing the value of the business to its shareholders, achieved through a combination of Value-based managementA variety of approaches that emphasize increasing shareholder value as the primary goal of every business. No par value stockStock issued by the company that does not have an arbitrary value (par value) assigned to it. Par valueAn 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.
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