Tag: investment

Hedge Funds

See Also Currency Exchange Rates Hedging Risk Currency Swap Transaction Exposure Exchange Traded Funds Hedge Funds Defined What is a hedge fund? A hedge fund is a private investment portfolio that makes aggressive speculative investments. Because hedge funds often have a very high minimum investment requirement, hedge fund investors are typically only institutional investors and

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Financial Instruments

See Also: What is a Bond Required Rate of Return Return on Asset Commercial Paper Hedging Risk Histogram Financial Instruments and Securities Financial instruments are contracts that represent value. They come in many varieties. In fact, financial managers and bankers have a lot of leeway in creating and issuing financial instruments. The Securities and Exchange

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Financial Leverage

See Also: Finance Beta Definition Finance Derivatives Hedge Funds Hedging Risk Financial Ratios Financial Leverage Definition In finance, leverage refers to using borrowed capital or financial derivatives to magnify the results of an investment. The value of a leveraged investment is greater than the value of the original capital contributed by the investor. When leveraging an investment,

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External Sources of Cash

See Also: Angel Investor Categories of Banks Commercial Paper Common Stock Convertible Debt Instrument Venture Capital External Sources of Cash In another article, I told you about Sue and generating cash from sources within her business. I will not detail her entire story at this time, but will tell you that we were successful in

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Efficient Market Theory

See Also: Economic Indicators Economic Value Added Supply and Demand Elasticity Business Cycle Porters Five Forces of Competition Efficient Market Theory Efficient market theory hypothesis proposes that financial markets incorporate and reflect all known relevant information. The validity of efficient market hypothesis is debated; however, whether or not efficient market hypothesis is valid, it is useful

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Dividends

See Also: Dividend Yield Capital Impairment Rule Dividend Payout Ratio Financial Ratios Dividends Explained Dividends are corporate profits distributed to shareholders. When a company makes a profit, the board of directors can decide whether to reinvest the profits in the company or to pay out a portion of the profits to shareholders as a dividend

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Dispersion

See Also: Company Life Cycle Annual Percentage Rate (APR) Adjusted Present Value (APV) Method of Valuation Allowance for Uncollectible Accounts Net Operating Loss Carryback and Carryforward Dispersion Definition In finance, dispersion describes a range of possible returns for an investment. It is a way to measure the riskiness of an investment. If the dispersion is

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Discounted Cash Flow Analysis

See Also: EBITDA Definition Steps to Track Money In and Out of a Company Arbitrage Pricing Theory Discount Rate Required Rate of Return (Discount Payback period) DPP Discounted Cash Flow Analysis Definition The definition of a discounted cash flow (DCF) is a valuation method used to value an investment opportunity. Discounted cash flow analysis tells investors

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Discount Rate

See Also: EBITDA Definition Cost of Capital Funding Arbitrage Pricing Theory Capital Budgeting Methods Required Rate of Return Discount Rate Definition The discount rate definition, also known as hurdle rate, is a general term for any rate used in finding the present value of a future cash flow. In a discounted cash flow (DCF) model,

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Weighted Average Cost of Capital (WACC)

See Also: Capital Asset Pricing Model Cost of Capital Funding Arbitrage Pricing Theory APV Valuation Capital Budgeting Methods Discount Rates NPV Required Rate of Return Weighted Average Cost of Capital (WACC) Definition The weighted average cost of capital (WACC) definition is the overall cost of capital for all funding sources in a company. Weighted average cost

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Cost of Capital Definition

See Also: Arbitrage Pricing Theory Capital Budgeting Methods Discount Rates NPV Required Rate of Return APV Valuation Cost of Capital Definition The cost of capital definition is a company’s cost of funding. Depending on the company’s capital structure, the cost of capital will incorporate its cost of debt as well as its cost of equity.

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Core Satellite Portfolio

See Also: Financial Instruments Investment Risk Common Stock Definition Prepare an Investor Package Fixed Income Securities Treasury Stock Venture Capitalists Definition Core Satellite Portfolio Definition Core Satellite asset allocation is an investment strategy that consists of two parts the “core” and the “satellite.” The first part is known as the core portfolio. It invests in

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