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Cost of equity

The cost of capital is a term used in the field of financial investment to refer to the cost of a company’s funds (both debt and equity). Equity is ... more

Security market line (SML)

Security market line (SML) is the representation of the capital asset pricing model. It displays the expected rate of return of ... more

Sharpe ratio

In finance, the Sharpe ratio (also known as the Sharpe index, the Sharpe measure, and the reward-to-variability ratio) is a way to examine the performance ... more

Active return

In finance, active return refers to that segment of the returns in an investment portfolio that is due to active management decisions made by the portfolio ... more

Weighted average cost of capital

The weighted average cost of capital is the rate that a company is expected to pay on average to all its security holders to finance its assets. It is the ... more

Logarithmic compounded return ( force of interest)

In finance, return is a profit on an investment. It comprises any change in value, and interest or dividends or other such cash flows which the investor ... more

Dividend payout ratio

Dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends. The part of the earnings not paid to investors is left ... more

Relation between a rate of return and a return over a period of time ( reinvested)

In finance, return is a profit on an investment. It comprises any change in value, and interest or dividends or other such cash flows which the investor ... more

Logarithmic rate of return

In finance, return is a profit on an investment. It comprises any change in value, and interest or dividends or other such cash flows which the investor ... more

Annualisation of logarithmic retururn

In finance, return is a profit on an investment. It comprises any change in value, and interest or dividends or other such cash flows which the investor ... more

Annualized volatility

In finance, volatility is a measure for variation of price of a financial instrument over time. return is a profit on an investment. It comprises any ... more

Capital Adequacy Ratio

Capital Adequacy Ratio (CAR), also known as Capital to Risk (Weighted) Assets Ratio (CRAR), is the ... more

Capital asset pricing model

In finance, the capital asset pricing model is used to determine a theoretically appropriate required rate of return of an asset, if that asset is to be ... more

Cost variance (CV)

Earned value management (EVM), earned value project management, or earned value performance management (... more

Hamada's equation

In corporate finance, Hamada’s equation, is used to separate the financial risk of a levered firm from its business risk. Hamada’s equation relates the ... more

Estimate at completion (EAC)

Earned value management (EVM), earned value project management, or earned value performance management (... more

Cost performance index (CPI)

Earned value management (EVM), earned value project management, or earned value performance management (... more

To-complete performance index BAC (TCPI-BAC)

Earned value management (EVM), earned value project management, or earned value performance management (... more

To-complete performance index EAC (TCPI-EAC)

Earned value management (EVM), earned value project management, or earned value performance management (... more

Tier 1 capital

Tier 1 capital is the core measure of a bank’s financial strength from a regulator’s point of view. It is composed of core capital, which ... more

Capital asset pricing model ( including size premium and specific risk)

In finance, the capital asset pricing model (CAPM) is used to determine a theoretically appropriate required rate of return of an ... more

Capital market line (CML)

Capital market line (CML) is the tangent line drawn from the point of the risk-free asset to the feasible region for risky ... more

Dividend discount model ( Gordon growth model)

The dividend discount model is a method of valuing a company’s stock price based on the theory that its stock is worth the sum of all of its future ... more

Financial leverage

In finance, leverage is a general term for any technique to multiply gains and losses. Most often it involves buying more of an asset by using borrowed ... more

Sortino ratio

The Sortino ratio measures the risk-adjusted return of an investment asset, portfolio, or strategy. It is a modification of the Sharpe ratio but penalizes ... more

Return over a single period

In finance, return is a profit on an investment. return is also used to refer to a profit on an investment, expressed as a proportion of the amount ... more

Black-Scholes formula - value of a call option for a non-dividend-paying underlying stock

The Black–Scholes /ˌblæk ˈʃoʊlz/ or Black–Scholes–Merton model is a mathematical model of a financial market containing derivative investment instruments. ... more

Present value of a perpetuity (Present Value of Int Factor Annuity)

A perpetuity is payments of a set amount of money that occur on a routine basis and continues forever. Present value of a perpetuity is an infinite and ... more

Compound interest

Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on. This addition of ... more

Rule of 72 (estimating an investment's doubling time)

Rule of 72 is a method for estimating an investment’s doubling time. The rule number 72 is divided by the interest percentage per period to obtain ... more

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