Term
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Define value in financial terms
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Definition
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Capital = Wealth that is used to generate more wealth
Finance = The discipline concerned with or the study of the efficient acquisition and utilization of capital.
Finance is the study of the creation of VALUE as it is measured in monetary terms
Capital ($) --> Managerial Decisions -->Shareholder Wealth($)
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Term
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Definition
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Value is the sum of all future cash flows expected to be generated by an asset (real or financial) or an entity (e.g., a firm) discounted to the present time at an appropriate cost of capital
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Term
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Definition
the ability to increase your wealth without investing any money or taking any risk
In well-functioning markets, the incentive to increase one’s wealth eliminates arbitrage opportunities resulting in the No-Arbitrage principle
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Term
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Definition
is an economic law stated as: "In an efficient market, all identical goods must have only one price."
The intuition for this law is that all sellers will flock to the highest prevailing price, and all buyers to the lowest current market price. In an efficient market the convergence on one price is instant. |
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Term
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Definition
The sum of future cash flows, discounted to the present
time at the appropriate cost of capital
http://www.investopedia.com/video/play/intrinsic-value/
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Term
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Definition
is the current quoted price at which investors buy or sell a share of common stock or a bond at a given time. Also known as "market price."
In the context of securities, market value is often different from book value because the market takes into account future growth potential. |
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