The discount factor of a company is the rate of return that a capital expenditure project must meet to be accepted. It is used to calculate the net present value of future cash flows from a project ...

Discounting a future cash flow expresses future returns in today's dollars. This allows a fair comparison between initial business expenses and your expected or realized returns. As an example, you ...

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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Book value is an accounting measure of the net value of a company. It’s used to calculate the valuation of a company based on its assets and liabilities. If owners or executives sought to make a quick ...

Daniel Jassy, CFA, is an Investopedia Academy instructor and the founder of SPYderCRusher Research. He contributes to Excel and Algorithmic Trading. Robert Kelly is managing director of XTS Energy LLC ...

Shareholder value is the return of an investment in a given company. Shareholder value is created when a company's returns exceed its cost of doing business. When a company's management team employs ...

Shareholder value is the return of an investment in a given company. Shareholder value is created when a company's returns exceed its cost of doing business. When a company's management team employs ...

Par value is an arbitrary low value assigned to shares to meet legal requirements. To compute par value of issued shares, multiply the number per share by total shares. Low par value reduces financial ...

Lifetime value (LTV) is a significant metric that helps estimate the growth of a company. By comparing LTV to customer acquisition cost, the results can help make crucial decisions. This might include ...

Here's how to calculate the present value of a perpetual annuity that promises to pay flat or growing annual payments with helpful examples. A perpetual annuity, also called a perpetuity, promises to ...