Value of the Firm

Present Value of Expected Future Profits

Economic Profit

•Economic profits are a normal rate of profit typically assessed in terms of the realized rate of return on stockholders' equity (ROE). 

the residual of sales revenue minus the explicit costs of doing business. It is the amount available to fund equity capital after payment for all other resources used by the firm.

Frictional Profit Theory 

Abnormal profits observed following an unanticipated change in demand or cost conditions

Monopoly profit theory

Above-normal profits caused by barriers to entry that limit competition